Man who led bank bailouts of 2008 is appointed president of Minneapolis Fed


The Federal Reserve Bank of Minneapolis has a new president – one with a very storied background.

The Minneapolis Fed announced on Tuesday it is appointing Neel Kashkari as its new president and CEO, succeeding Narayana Kocherlakota in January.

Kashkari, 42, ran an unsuccessful campaign last year as the GOP candidate in the gubernatorial race for California, losing out to incumbent Jerry Brown, who won 59 percent of votes.

The Wall Street Journal notes although an aerospace engineer by trade, he joined Goldman Sachs in 2006 before making his most telling contribution in the financial sphere, as part of the Bush administration's response to the 2008 financial crisis.

He ran the government's $700 billion Troubled Asset Relief Program – which "stabilized the financial system" by bailing out the country's beleaguered banks – and managed to turn a $12 billion profit for the taxpayer in doing so.

The Los Angeles Times reports he received mixed reviews for his six-month stint as the first TARP administrator, with some watchdogs complaining he was "overly secretive and deferential to the big banks."

But he told MPR News "big banks did not get any special deal," saying they needed to "put medicine into the economy quickly," and it was best to do that starting with the bigger institutions."

"We believe that Neel has the right combination of skills: policymaking, management and leadership, banking and financial markets, and communications," MayKao Hang, the soon-to-be chairwoman of the Minneapolis Fed board of directors, said in the announcement. "These skills make him uniquely qualified to lead the Minneapolis Fed and serve as a valued participant on the Federal Open Market Committee."

What does the Minneapolis Fed do?

The LA Times notes the Minneapolis Fed is one of the 12 regional banks that make up the Federal Reserve System, and its president is a "rotating" member of the Federal Open Market Committee that sets the U.S. Fed's monetary policy.

This means the Minneapolis Fed plays a national role as the U.S. Fed strives to achieve its aims of low inflation and high employment, as well as having a say when decisions on economic stimulus measures needed during times of crisis.

More pertinently now, it plays a role in what happens to interest rates – which the Fed is expected to increase in the coming months, which in turn has a knock-on effect on the amount interest we pay on mortgages, loans, and what returns we get on savings.

On the local level, MPR News reports the Fed supervises and examines commercial banks and holding companies across the Upper Midwest, stretching from Montana to Michigan.

The news organization notes Kashkari will get his first chance to influence national policy in 2017, when he gets a seat at the table as part of the member rotation on the Fed's Open Market Committee (FOMC).

Neil Dutta, an economist at Renaissance Macro, told Business Insider he considers the Minneapolis Fed to have a more aggressive tone to fiscal policy compared to the consensus, and should Kashkari adopt that tone when he joins the FOMC he could potentially argue to steeper interest rate rises.

Next Up

Autumn Merrick, Autumn Rose Merrick

Man charged in shootout, crash that killed 18-year-old on scooter

Autumn Rose Merrick was with a friend near the Holiday gas station.

D Quagon - DOC photo

DOC searching for convicted sex offender who has gone on the run

The recently released man removed his GPS monitoring device.

Anthony Edwards

Timberwolves: 5 things you can count on for the 2021-22 season

The Timberwolves hope to return to relevance this season.


With parking ramp roof empty most of time, Chaska adds pickleball courts

The top level isn't often used, so the entities teamed up to meet a growing need for pickleball courts.

Mauno Silpala

Former UN official ID'd as pedestrian killed in Alexandria

The native of Finland retired in 2005 and was living in Golden Valley.

Screen Shot 2021-10-20 at 9.37.24 AM

Here's what the future radar shows; 'a few robust' storms possible

Rain is on the way. Some hail is also possible in stronger storms.

sean peterson hopkins

Mom of man killed in Hopkins says son died in her arms

He was fatally shot on Sunday night at the apartment building where he lived.

Screen Shot 2021-10-20 at 6.42.51 AM

Boy, 15, undergoes surgery after being shot near south Mpls. park

The 15-year-old was transported to HCMC and was taken into surgery.

i-94 crash st. michael - 2021.10.19

Maple Grove man ID'd as victim of fatal crash on I-94

That side of the freeway was closed for a few hours on Tuesday afternoon.


It's called 'The Minneapolis Plan' and it's meant to prevent bank bailouts

The Minneapolis Fed pitches a recipe to keep banks from getting 'too big to fail'

Feds close Minnesota bank

The FDIC shutdown Patriot Bank in Forest Lake Friday. First Resource Bank in Savage agreed to take over the assets and deposits from the failed Minnesota bank. There have been seven U.S. bank failures in 2012. Patriot Bank is the first to fail in Minnesota this year.

Man in custody after downtown Minneapolis bank threat

A downtown Minneapolis building was evacuated Friday afternoon after a threat was made against the M & I Bank, according to witnesses at the scene, WCCO reports. Witnesses say a man entered the M & I Bank in the Gaviidae Commons in downtown Minneapolis and made threats. A man also allegedly made a threat to WCCO-TV.