UPDATE 2-Sack withdraws resignation, to remain at NY Fed

Fri Jun 29, 2012 12:00pm EDT

NEW YORK, June 29 (Reuters) - Brian Sack, who oversees the Federal Reserve's open market actions, and who was to leave the New York Fed bank later on Friday, will instead stay on as senior policy advisor to President William Dudley.

The Federal Reserve Bank of New York said on Friday that Sack withdrew his resignation - which was announced in April - and that he starts the new job on June 30.

In the new position, Sack will "provide analytical expertise and guidance with respect to monetary policy, financial markets and the U.S. economy," the New York Fed said in a statement.

Sack, 41, will no longer be involved with the Fed bank's markets group, which conducts monetary policy for the U.S. central bank. Seen as a rising star in the Fed, he helped steer it through the fallout from the financial crisis and the shaky U.S. recovery from recession.

The markets group deals directly with Wall Street and foreign central banks, carrying out Fed actions in the open market such as the two quantitative easing programs since 2009, dubbed QE1 and QE2.

Last week, Simon Potter was named the new head of the markets group. The 51-year old is an internal director of economic research, and starts that job on June 30.

Dudley, who as president has a permanent vote on U.S. central bank policy, ran the markets group before Sack. Dudley replaced Timothy Geithner, now the U.S. Treasury Secretary, as New York Fed president in 2009.