Stern is replacing Cathy E. Minehan, president of the Federal Reserve Bank of Boston, who has held the position of FSPC chair since 1998. Minehan was recently named vice-chair of the Conference of Presidents, a leadership group comprised of Reserve Bank presidents.
As FSPC chair, Stern will oversee the operations of the Federal Reserve Banks' various product offices that direct the provision of financial services to depository institutions. Under the terms of the Monetary Control Act, many of these services are priced. In total, Reserve Banks collected about $900 million in gross revenue from such services in 2002. The product offices include the Retail Payments Office, the Wholesale Product Office, the Cash Product Office, the Treasury Relations and Support Office, Customer Relations and Support Office, and the Financial Support office. The FSPC also works with the financial services industry to improve the nation's payments system, the so-called plumbing of the economy.
Stern noted a national and international payments system in transition. “The shift from paper to electronics is well under way and bodes well for increased efficiency, safety and soundness,” Stern said. “The next five years will likely bring accelerated change as consumers and businesses adopt more convenient payments choices. It is a significant juncture, a time to be both progressive and prudent. As they say, the pipes are under the sink for good reason, but good plumbing requires strategic choices and sound maintenance.
“I look forward to building on the exceptional progress that Cathy and her colleagues have achieved in the payments arena,” said Stern. “Her steady-handed stewardship tackled Y2K, navigated the challenges of September 11th and modernized our operational infrastructure.”
Stern becomes the third chair of the FSPC, which was created in 1994 to coordinate management and strategic planning for the provision of financial services by the 12 regional Reserve Banks. Stern is joined on the committee by four Federal Reserve colleagues, including Sandra Pianalto, president of the Federal Reserve Bank of Cleveland, Anthony M. Santomero, president of the Federal Reserve Bank of Philadelphia, Paul M. Connolly, first vice president of the Federal Reserve Bank of Boston and Walter A. Varvel, first vice president of the Federal Reserve Bank of Richmond.
As one of the 12 Federal Reserve Banks, the Federal Reserve Bank of Minneapolis contributes to a variety of Federal Reserve System functions, including operation of a nationwide payments system, distribution of the nation’s currency and coin, supervision and regulation of member banks and bank holding companies, and serving as a fiscal agent for the U.S. Treasury. Additionally, the president of the Minneapolis Fed serves as a member of the Federal Open Market Committee, the monetary policymaking arm of the Federal Reserve’s Board of Governors.
Together with its branch in Helena, Mont., the Minneapolis Fed serves the Ninth Federal Reserve District, which includes Minnesota, Montana, North and South Dakota, 26 counties in northwestern Wisconsin and the Upper Peninsula of Michigan.