March 10 (Reuters) – The chief executive officer of failed Silicon Valley Bank, Greg Becker, is no longer on the board of directors at the Federal Reserve Bank of San Francisco.
Becker’s departure was effective on Friday, a spokesperson for the Federal Reserve said. Earlier on Friday, Silicon Valley Bank was closed by regulators.
The spokesperson declined to say how Becker exited the San Francisco Fed board. Becker served as a Class A director at the San Francisco Fed, one of three finance executives representing member banks in the San Francisco Fed district.
Each regional bank is overseen by boards comprised of private citizens. In addition to having three directors to represent banks, there are six other directors who present a mix of local businesses and community interests. Three of those directors are selected by the Fed’s Board of Governors in Washington, while the remainder are selected in a local process.
The 12 regional Federal Reserve banks are quasi-private institutions overseen by the Fed in Washington. Their respective boards watch over the banks directly and provide advice on governance as well as local economic intelligence.
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Most importantly, these boards also lead the process to select new presidents when there are vacancies, although directors from firms regulated by the Fed are not allowed to participate in that process.
The directors of the Fed banks have been in the spotlight in recent years as the central bank has faced criticism that bank directors lacked racial and gender diversity and were too weighted towards the business and banking community. The Fed has been working on expanding who serves in these roles.
The boards have also created issues for the Fed in years past. The New York Fed’s board was heavily dominated by bankers at the onset of the global financial crisis and even included the leader of Lehman Brothers, a firm whose failure in the fall of 2008 is widely seen as kicking off the most acute phase of the financial crisis.
In 2019, the Chicago Fed’s then board chair resigned her term early as her employer faced legal trouble.
Reporting by Michael S. Derby; Editing by Leslie Adler and Diane Craft