William J. McDonough, whose decade-long tenure as Federal Reserve Bank of New York president included dealing with the market scare of Long-Term Capital Management LP and the aftermath of the Sept. 11 terror attacks, has died. He was 83.
He died Jan. 22 at his home in Waccabuc, New York, according to a statement released Thursday by the New York Fed. No cause was given.
“Bill McDonough was a formidable force in the global economy,” former Fed Chairman Alan Greenspan said in an email. “I and the rest of the international financial community mourn his passing.”
McDonough also served as the first chairman of the Public Company Accounting Oversight Board from 2003 to 2005. The nonprofit corporation, established by Congress in the aftermath of the Enron Corp. accounting scandal, oversees corporate audits.
McDonough’s tenure at the helm of the New York Fed, from 1993 to 2003, spanned some of the best -- and worst -- times for the U.S. economy and stock markets. He played a key role in helping ensure that banks kept credit flowing to South Korea during the Asian financial crisis in the late 1990s and was at the center of the Fed’s efforts to make sure the banking industry was prepared for the Y2K computer scare at the start of 2000.
Advocated Transparency
He was a strong supporter of Greenspan’s decision in 1994 to begin announcing the central bank’s interest rate decisions, the first step toward making the Fed more transparent to the markets and the public.
Fluent in Spanish and French, McDonough came to the New York Fed in 1992 as head of Markets after spending 22 years at First Chicago Corp. The U.S. Navy veteran took over as president the following year.
“Bill shook up the bank internally in a refreshing way, giving a number of us a chance to succeed or fail on our own merit,” said Peter Fisher, a former Fed official who now teaches at Dartmouth College. “It was bracing.”
That was certainly the case in 1998, when McDonough and Fisher worked together to head off the bankruptcy of Long-Term Capital by arranging a private rescue of the giant hedge fund.