April 3 Federal Reserve Governor Jeremy Stein,
who has played a leading role in elevating the topic of
financial stability in the U.S. central bank's monetary policy
deliberations, will step down on May 28 to return to his
teaching post at Harvard University.
Stein's departure will open up a second vacancy on the
normally seven-person Fed board, assuming the U.S. Senate gives
its approval to three nominees already awaiting confirmation.
Stein, 53, has served at the Fed for nearly two years. He
announced his departure in a resignation letter to President
Barack Obama on Friday, which the Fed released publicly.
"Jeremy has made important contributions and served as an
intellectual leader during his time at the board," Fed Chair
Janet Yellen said in a statement. "His understanding of monetary
policy and markets as well as his expertise in banking and
financial regulation has proven invaluable in his service to the
Federal Reserve and the country."
One of three governors on the Fed's financial stability
committee, Stein's legacy will probably rest on his efforts to
convince fellow policymakers that they should stand ready to
raise interest rates to head off any dangerous asset-price
bubbles that may arise.
He gave a speech more than a year ago suggesting that
policy, and not just regulation and supervision, could be a tool
to deal with financial instabilities that threatened the
economy. The suggestion broke from monetary tradition and
appears to have won partial support from Yellen and former Fed
Chairman Ben Bernanke, among some others.
(Reporting by Timothy Ahmann; Editing by Andrea Ricci)