By Steven K. Beckner

(MNI) – The Federal Reserve Bank of Kansas City looked within to
select its next President, choosing Esther George to succeed Thomas
Hoenig following a six-month search.

George, a long-time associate of Hoenig since his days as a top
bank supervisor in the tenth Federal District, was named Thursday to
become the ninth president of the Kansas City Fed.

George, the Bank’s 53-year-old first vice president and chief
operating officer, will become president upon Hoenig’s Oct. 1
retirement, as MNI had anticipated. Her appointment was approved by the
Fed Board of Governors in Washington.

She will represent the Kansas City Fed at next week’s two-day
meeting of the Fed’s policymaking Federal Open Market Committee. She
will be an FOMC voter in 2013. She has attended FOMC meetings in the
past, most recently during 2010.

George will also take on another big role next August — that of
host of the Kansas City Fed’s esteemed annual symposium in Jackson Hole,
Wyoming, a mecca for central bankers from all over the world.

In announcing her appointment, Paul DeBruce, chair of the Kansas
City Fed’s board of directors, said “Esther is a great leader who
possesses an extraordinary depth of knowledge of the financial system
and the economy that will enable her to carry out the tradition of
excellence at the Kansas City Fed.”

“We are confident that she will uphold the high standards of
performance at this Bank and will be a strong voice for Main Street on
national policy issues,” said Bruce, who is CEO and founder of DeBruce
Grain Inc., Kansas City, Mo.

In a statement released by the Kansas City Fed, George said, “It is
a privilege to have this opportunity to lead the Bank as it continues to
fulfill its key missions of conducting monetary policy, providing
financial services and supervising and regulating financial
institutions.”

“The financial and economic landscape is changing in our region and
around the world, and I am mindful of the challenges ahead,” the
Missouri native said. “I am honored to be selected to serve.”

Little is known of George’s views on policy views, but she has
worked very closely with Hoenig since joining the Bank in 1982.

Hoenig was known for his outspoken stands against considering banks
“too big to fail.” In the monetary policy arena, Hoenig consistently
warned in recent years that keeping interest rates too low risked not
just inflation, but excessive risk-taking. He opposed quantitative
easing and the Fed’s extended zero federal funds rate policy.

It cannot be assumed, however, that George will follow in Hoenig’s
footsteps in every regard.

After serving as a commissioned bank examiner for seven years,
George became a member of the Bank’s official staff in 1995 and went on
to hold positions in research support, public affairs and human
resources functions.

From 2001 through her appointment to first vice president in 2009,
George was senior vice president in charge of the Division of
Supervision and Risk Management. In that position, she was responsible
for the supervision and regulation of the District’s 170 state-chartered
member banks and nearly 1,000 bank and financial holding companies, as
well as the Bank’s discount window and risk management functions.

During her tenure in banking supervision, she was directly involved
in the Tenth District’s banking supervision and discount window lending
activities during the banking crisis of the 1980s and after the 9/11
terrorist attacks.

George is also a former chair of the Federal Reserve System’s
Community Banking Organizations Management Group and is also a member of
the Federal Reserve Bank of Kansas City’s Management Committee, which is
responsible for strategic planning and policy direction.

In 2009, George served for a time at the Federal Reserve Board of
Governors in Washington, D.C., as acting director of the Board’s
Division of Bank Supervision and Risk Management during the financial
crisis, where she worked closely with the Board on System matters.

She also has experience in international central banking issues,
having made presentations at the Bank for International Settlements
Financial Stability Institute programs in Lima, Peru; Abu Dhabi, U.A.E.;
and Singapore. She also has served as the Tenth District’s lead officer
for international partnership programs involving the central banks of
Morocco, Iraq and Malawi.

George holds a B.S.B.A. in business administration from Missouri
Western State University in St. Joseph, Mo., and an M.B.A. from the
University of Missouri-Kansas City. She is a graduate of the American
Bankers Association Stonier Graduate School of Banking and the Stanford
University Executive Program.

She has been married to Kevin George for 30 years. They have a
daughter and a son, both of whom attend colleges in Missouri.

George is the first woman to head the Kansas City Fed. She will
become the second serving female Federal Reserve Bank president.

** Market News International **

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