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William Joseph McDonough

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For other people named William McDonough, see William McDonough (disambiguation).
William McDonough
President of the Federal Reserve Bank of New York
In office
July 19, 1993 – July 21, 2003
Preceded byE. Gerald Corrigan
Succeeded byTimothy F. Geithner
Personal details
Born
William Joseph McDonough

(1934-04-21)April 21, 1934
Chicago, Illinois, U.S.
DiedJanuary 22, 2018(2018-01-22) (aged 83)
Waccabuc, New York, U.S.
EducationCollege of the Holy Cross (BA)
Georgetown University (MA)

William Joseph McDonough (April 21, 1934[1] – January 22, 2018) was an American economist. He was president and CEO of the Federal Reserve Bank of New York from 1993 to 2003. He was also on the board of the Bank for International Settlements and chairman of the Basel Committee on Banking Supervision.

Prior to joining the Fed, McDonough had a six-year career with the U.S. State Department followed by a 22-year career at First Chicago Corporation. After leaving the Fed he was the first chairman of the Public Company Accounting Oversight Board for three years, and then became vice chairman and senior advisor to the CEO at Merrill Lynch in early 2006, retiring at the end of 2009.

Early life and education

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McDonough was born in 1934, in the West Side of Chicago, Illinois, to Irish immigrants.[1][2] He became an orphan by the age of 11 following the deaths of his mother and his insurance-salesman father.[1] He lived with an aunt and worked as a newspaper delivery-boy before attending Campion High School in Prairie du Chien, Wisconsin,[1] where he was first in his class for four years.[1]

For his academic achievements, he was admitted to the College of the Holy Cross in Worcester, Massachusetts, and earned a bachelor's degree in 1956.[1][3]

He received a masters degree in economics from Georgetown University in 1962.[1]

Career

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Early career

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McDonough was with the U.S. Navy from 1956 to 1961.[4] During this period he spent time on a destroyer, was stationed in Pearl Harbor, taught at the U.S. Naval Academy, and earned his masters degree by attending night school.[3]

He was with the U.S. State Department from 1961 to 1967,[4] and became fluent in Spanish and French.[1] He was sent to Uruguay as a diplomat,[3][1] and also worked in Washington D.C. on Latin American policy.[3]

First Chicago Corporation and its bank, First National Bank of Chicago, needed someone with economic skills and international experience, and hired McDonough in 1967.[3][1] First Chicago initially sent him to Paris and then London, before bringing him back to the head office in the U.S., where he rose to vice chairman of the corporation[3] in 1986.[5] Concluding he was unlikely to become CEO of the firm, McDonough retired from First Chicago[3] in 1989 after a 22-year career there.[1]

Before joining the Federal Reserve Bank of New York, McDonough worked as a consultant and did charity work for several years.[3]

Federal Reserve Bank of New York

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In 1992, McDonough was hired by the Federal Reserve Bank of New York as an executive vice president[6] and head of markets.[7][1] The bank's foreign exchange and domestic market operations were consolidated and placed under his direction.[6] He was in charge of the bank's open market operations.[8]

He served as president and chief executive officer of the Federal Reserve Bank of New York from July 1993 to July 2003.[9] As president of the New York Fed, he also automatically served as the vice chairman and a permanent member of the Federal Open Market Committee, which makes decisions about interest rates.[10]

McDonough also served on the board of directors of the Bank for International Settlements,[11] and as chairman of the Basel Committee on Banking Supervision.[11]

As president of the Federal Reserve Bank of New York, McDonough guided the New York Fed through the 1997 Asian financial crisis,[1] and helped ensure that international banks kept credit flowing to South Korea during that period.[7] He oversaw the institution’s preparations for guarding against a Y2K computer-conversion market failure at the onset of the year 2000.[3][1] And he oversaw stabilizing the Federal Reserve and the U.S. financial system in the immediate aftermath of the September 11 attacks in 2001.[1][7][3] He was also a strong supporter of chairman Alan Greenspan's decision in 1994 to begin announcing the Federal Reserve's interest rate decisions.[7]

His most controversial action was brokering a private-sector bailout in 1998 of Long-Term Capital Management, a large hedge fund which had amassed billions of dollars in debt and whose imminent bankruptcy threatened to spark a contagion of investor panic.[1][10]

In speeches he made during his tenure at the Fed, he criticized the ballooning compensation of corporate CEOs,[3][1][7] the excess risk being increasingly taken on Wall Street,[1] and the growing income inequality in the U.S.[7][12]

Career post-Fed

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In 2003, immediately after leaving the New York Fed, McDonough was appointed as the first chairman of the Public Company Accounting Oversight Board, a U.S. non-profit regulatory entity created by the Sarbanes-Oxley Act of 2002 to oversee audits of public companies and broker-dealers.[13][14] He resigned the post towards the end of 2005.[15]

In January 2006, he was appointed vice chairman of Merrill Lynch and as a senior advisor to its CEO Stanley O'Neal.[16][14] He was responsible for advising senior management in the company's business development efforts with governments and financial institutions.[14] He retired from Bank of America, which acquired Merrill Lynch, at the end of 2009.[17]

Additional posts

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McDonough was vice chairman of the Council on Foreign Relations,[9] where he had been a director since 1995.[18]

He was chairman of the Economic Club of New York from 1996 to 2000.[19]

In 2004 he was elected to the board of advisors of the Yale School of Management.[20]

He was chairman of the board of the Investment Committee for the United Nations Joint Staff Pension Fund,[21] and was co-chairman of the United Nations Association of the United States of America (UNA-USA).[22] He was also an emeritus member of the Group of Thirty, an influential Washington-based financial advisory body.[23]

He was also a member of the board of directors of the New York Philharmonic Orchestra.[9]

Personal life

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McDonough died January 22, 2018, at the age of 83, at his home in Waccabuc, New York in Westchester County.[7] He was survived by his wife, Suzanne Clarke McDonough, and six children[7] from a former marriage.[8]

References

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  1. ^ a b c d e f g h i j k l m n o p q r Thomas Jr., Landon (January 26, 2018). "William McDonough, Who Guided New York Fed Through Crises, Dies at 83". The New York Times. Retrieved July 14, 2024.
  2. ^ "Americans are banking on William McDonough". Irish Echo. February 16, 2011. Retrieved August 18, 2024.
  3. ^ a b c d e f g h i j k Hagerty, James R.; Derby, Michael S. (January 26, 2018). "William J. McDonough Overcame Childhood Traumas to Help Steer U.S. Economy". Wall Street Journal. Retrieved July 14, 2024.
  4. ^ a b "William McDonough". WNYC. Retrieved July 14, 2024.
  5. ^ Cuff, Daniel F.; Greenhouse, Steven (November 20, 1986). "First Chicago Chooses 'Doer' as Vice Chairman". The New York Times. Retrieved August 9, 2024.
  6. ^ a b Gilpin, Kenneth N. (July 29, 1992). "Shifts at New York Fed Announced". The New York Times. Retrieved August 13, 2024.
  7. ^ a b c d e f g h "William McDonough, N.Y. Fed Chief in Twin Crises, Dies at 83". Bloomberg.com. 25 January 2018.
  8. ^ a b Nasar, Sylvia (July 17, 1993). "Deputy Chosen as Head of New York Fed". The New York Times. Retrieved August 9, 2024.
  9. ^ a b c "New York Fed president to retire". CNN Money. January 16, 2003. Retrieved August 9, 2024.
  10. ^ a b Andrews, Edmund L. (January 17, 2003). "Head of New York Fed Says He'll Retire". The New York Times. Retrieved August 9, 2024.
  11. ^ a b "Mr. McDonough appointed Chairman of the Basle Committee on Banking Supervision". Bank for International Settlements. June 9, 1998. Retrieved August 10, 2024.
  12. ^ Derby, Michael S. (January 25, 2018). "Former New York Fed Chief William McDonough, Who Guided Bank Through 9/11, Dies". The Wall Street Journal. Retrieved September 3, 2024.
  13. ^ Norris, Floyd (2003-04-16). "S.E.C. Picks A Fed Banker To Lead Panel". The New York Times. Retrieved 2009-04-16.
  14. ^ a b c Moyer, Liz (January 23, 2006). "McDonough Heads To Merrill, Acquisitions Ahead?". Forbes. Retrieved August 10, 2024.
  15. ^ "Chairman William J. McDonough Announces His Resignation". Public Company Accounting Oversight Board. September 23, 2005. Retrieved August 10, 2024.
  16. ^ Smith, Randall (January 23, 2006). "At Merrill Lynch, McDonough Takes Adviser Position". The Wall Street Journal. Retrieved September 3, 2024.
  17. ^ Witkowski, Wallace (December 16, 2009). "Bank of America Vice Chairman McDonough to retire". MarketWatch. Retrieved August 13, 2024.
  18. ^ "The Council on Foreign Relations from 1921 to 1996 - Historical Roster of Directors and Officers".
  19. ^ "Chairs of the Club". Economic Club of New York. Retrieved September 3, 2024.
  20. ^ "Yale SOM Appoints New Board of Advisors". Yale School of Management. January 30, 2004. Retrieved August 9, 2024.
  21. ^ "Report of the United Nations Joint Staff Pension Board" (PDF). United Nations Joint Staff Pension Fund. July 2006. Retrieved August 10, 2024.
  22. ^ Pickering, Thomas R.; McDonough, William J.; Elmendorf, A. Edward (November 2, 2010). "Let the U.N. Criticize Us". The New York Times. Retrieved August 10, 2024.
  23. ^ "Financial Reform: A Framework for Financial Stability" (PDF). washingtonpost.com. Group of Thirty. January 15, 2009. Retrieved August 10, 2024.
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Other offices
Preceded by President of the Federal Reserve Bank of New York
1993–2003 		Succeeded by
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