Looking Back:

A retrospective conversation with William Poole

[St. Louis Fed Leadership]

Looking at the operating environment of the St. Louis Fed itself, what do you regard as the most significant changes that affected the Bank during your tenure?

There’s no question in terms of the scale of the effects, it’s the consolidation in financial services that led to ending check and cash operations in two branches (Little Rock and Louisville) and selling the buildings there. That was an enormous change, going from branches that each had 150 employees down to about eight. We have more of that coming in St. Louis and Memphis because we’ll be closing down check operations in these locations. And there is consolidation in other services, too; so, we are much less a stand-alone company than we were 10 years ago. Some IT and HR services that used to be here, for example, are now elsewhere. What’s happened here is not unlike what’s happened to a lot of companies that have outsourced support operations. It’s not unique to the Fed.

What do you think the Federal Reserve might look like 10 to 20 years from now?

Who is it that said, “Forecasting is difficult, especially about the future?” How do I come to grips with that question, beyond saying that there’s always uncertainty, and if anyone looks back at this annual report, they’ll probably laugh at what I’ll say, but that’s the way these things always are. First of all, historically you don’t find significant changes in monetary arrangements in the United States absent of a big problem or screw-up of some sort. … I would not expect the Federal Reserve Act to be opened and revised in any important respect in the absence of a significant monetary problem.

That means that we’ll probably have the same basic framework in the law. It seems to me that the main thing that the Reserve banks need to do and probably will do is to manage themselves efficiently enough—which I think we do a pretty good job of doing—and provide public services through economic education, economic research and so forth that are regarded in the public debate as being worth what we spend on them. From time to time, there will probably be some attacks on us from Congress. That happens. But if we continue to perform pretty well on the macroeconomic front, I don’t think we’re going to be very vulnerable, and the attacks that occur from time to time will not have any material effect on the law. That means that the Federal Reserve banks will shrink in terms of their operating responsibilities. I think we need to get used to the prospect of Reserve banks being smaller in terms of employment, and more vigorous and more rigorous in terms of our intellectual output.

What will you miss most about being president of the St. Louis Fed?

I’ll miss the excitement and challenge of the monetary policy process. That’s been very interesting to observe and be part of.

Least?

I don’t think anybody likes doing performance reviews and some of that administrative stuff (laughter). Fortunately, though, the scale of it is pretty small. I have said to many people, and I really believe it, that there is nothing I’ve done here that is as awful as grading a huge stack of exams over winter break. I’m glad I left that behind.

Are there any closing comments you would like to make?

I am through and through an academic, and I had no managerial experience coming into this job. I really enjoyed learning about a lot of modern management practices, and I felt fortunate to have some very good people do all the hard work. There are a lot of really good people here.