The Federal Reserve Bank of Atlanta made history with the selection of Raphael Bostic as its new president and CEO on Monday.
He will be the first African-American to lead a Federal Reserve Bank in the agency's 104-year history.
In a recorded video statement, Bostic admitted he feels overwhelmed.
"It’s not lost on me that I would be the first or I am the first African-American to lead a Federal Reserve institution,” he said. “It’s a tremendous privilege. I tell people I’m now a 'Jeopardy' question. So, you know, I do recognize that it is a very big deal."
In a statement, the Federal Reserve Bank of Atlanta said it embraces diversity and was impressed with what it calls Bostic's "deep knowledge of income inequality, economic opportunity and consumer banking issues."
U.S. Congressman David Scott said he plans to hug Federal Reserve Chair Janet Yellen and congratulate her when he sees her next.
"Thank you and hallelujah to the Fed!” Scott said. “We got to let this light shine, because it is a glorious moment in the history of our nation. This is the very first time we have an African-American serve as a regional president of the Fed. And it is the Fed that is the fulcrum of our economic system.”
Scott was among those who called on the Federal Reserve in September 2016 to consider diverse candidates to replace its outgoing president, Dennis Lockhart, who retired on Feb. 28.
“Atlanta is the cradle of the civil rights movement, so it is only fitting that our city be home to the first African-American head of a Federal Reserve Bank,” said U.S. House Rep. John Lewis in a statement. “Metro Atlanta and the South were hit hard by the Great Recession, and it is my hope that the Federal Reserve works to make sure the doors of opportunity are open to everyone.”
Lewis signed onto a letter in May 2016 calling for greater diversity on the Federal Reserve.
“I’m going to do my very best to make people proud of the decision and show that this could have happened a long time ago, but we’re happy that it happened now,” Bostic said. “I look forward to this being a stepping stone for many others to have this opportunity as well.”
Jordan Haedtler, deputy campaign manager of the activist group Fed Up, said the appointment is long overdue.
His group advocates for more public representation at the Federal Reserve, including racial and socioeconomic diversity.
"Atlanta is a diverse region,” Haedtler said. “It makes sense for this selection here. Not only Atlanta but the other states that are included in the Sixth Federal Reserve district are heavily black states where African-American workers comprise a large percentage of the labor force, so somebody who's looking at racial disparities and economic outcomes is important [for them] to have a seat at the table."
He said his group went through Federal Reserve transcripts in 2010 and found no discussion of racial disparities.
“African-American unemployment was above 15 percent the entire year, but transcripts show that racial disparities in the unemployment figure never once came up during the Fed's meeting that year,” Haedtler said. “That’s just unacceptable, but it’s pretty clear the reason why. There wasn’t a person of color in the room. Now that will be different.”
William Michael Cunningham, the author of the Black Federal Reserve Board blog, said having a person of color provides a depth of insight that only a person with the cultural context and experiences can provide to a financial institution. And greater diversity at senior levels, he said, benefits everyone.
“When you got rid of Jim Crow in the South, in Atlanta in particular, the economy boomed,” Cunningham said. “Because suddenly black people had more money and spent it. Everybody did better by getting rid of Jim Crow. The ultimate economic impact was in the billions of dollars because of the elimination of segregation.”
Bostic said one of his priorities will be to monitor how capital is being distributed.
“Capital is so important for every community,” he said. “And as an institution that is closely tied and linked to sources of capital through the banking industry, it’s important that the Fed be a voice to monitor how that capital is being deployed. And providing guidance to ensure that when capital is deployed, it’s done in an efficient and effective way that really helps all the residents in communities.”
Bostic was appointed by the U.S. Senate to serve between 2009 and 2012 as assistant secretary for policy development and research at the U.S. Department of Housing and Urban Development. He said he has been working on housing issues “for a long time” and wants to “completely and consistently” integrate housing in policy discussions.
“We’re certainly going to be looking at how housing is contributing or hampering people’s quality of life in the communities we’re responsible for,” Bostic said. “I’m going to be asking that question on a regular basis.”
The Fed’s Role
Bostic also said he wants the bank to be more active in the community.
“To leverage the bank and its place as a civic leader to send messages and to be part of a dialogue about how we improve what happens on the ground in Atlanta, but also in communities throughout the district,” he said. “There’s so much diversity that we have and I want to make sure this bank and its voice is a part of all of the conversations that need to be taking place.”
He said he also hopes to keep it a stable agency not affected by “day-to-day politics.”
“Economies work better when there’s certainty and when there’s stability,” Bostic said. “An independent organization creates lot of stability in terms of businesses knowing what their economic targets are, as well as consumers knowing prices will stay where they are.”
He said it’s important for the Federal Reserve to make sure “banking institutions operate in a safe and sound manner.”
“Because as we’ve seen not 10 years ago, when the banking system becomes unstable and is on the verge of collapse, everything is on verge of collapse,” Bostic said. “So there’s a critical role to be played that we never get close to that again. And the Fed as a lead regulator of banking institutions is going to be important for that.”
The Federal Reserve Bank of Atlanta serves the Sixth Federal Reserve District, which covers the states of Alabama, Florida, and Georgia and parts of Louisiana, Mississippi and Tennessee.