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What will Lockhart do after departing the Fed?


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What will Lockhart do after departing the Fed?

Atlanta Fed President Dennis Lockhart announced last monththat he will officially retire Feb. 28, 2017, opening up uncertainties about whowill guide the Atlanta Fed and the Southeastern economy in its next chapter.But another big question concerns what Lockhart's plans are for the future.

At 70, Lockhart could certainly decide to retreat intoprivacy and enjoy proper retirement. But with "Fed president" as aresume line item for past experiences, there are also plenty of employmentopportunities in a wide variety of sectors.

A lot of former Fed presidents take on new jobs simplybecause a lot of them retire "when they're young enough to still have acareer in front of them," says University of California at Irvineprofessor of economics Gary Richardson.

The Federal Reserve Banks have set rules around retirementin which an appointee older than 55 at the time of appointment is limited to a10-year term limit. This is the case for Lockhart, who was 60 years old when hewas appointed in 2007. Anyone younger than 55 at the time of appointment mustretire by the age of 65. This meansthat most presidents are leaving their banks around the age of 65, when theystill might have enough energy to try a new career.

But what careers do most Fed presidents transition intoafter leaving? Richardson, who was also the Federal Reserve System's historianbased out of the Richmond Fed, says history is the most accurate crystal ball.

The last few presidents in Atlanta went on to jobs ordirectorships in private companies, as Monroe Kimbrel did when he left the bankin 1980 to become vice chairman of First Railroad and Banking Co. of Georgia.Or Jack Guynn, who joined the board of directors of Genuine Parts Co. when heleft in 2006.

Lockhart's personal past might also make a case for a returnto a job in the private sector. For 17 years, he worked with Citicorp/Citibank (nowCitigroup Inc.) beforebecoming president of specialty finance firm Heller International Group, wherehe spent 13 years.

For most Fed presidents, banks seem to be the most popularlanding point after departing the Fed. In an analysis of president biographiespulled from the Richmond Fed and S&P Global Market Intelligence, about 17%of all presidents were hired into careers at private sector banks after leavingtheir reserve bank, many of them becoming CEOs or presidents of those companies.

More recently, presidents have been heading into theclassroom after departing the Fed.

"From the '70s through the '90s, you have a growingnumber of Ph.D. economists running [Fed] banks, and then those Ph.D. economistswill more often than not go back into academia," Richardson said.

Lockhart does not have a Ph.D. — not beyond an honorarydoctoral degree from Georgia State University. But his tenure at GeorgetownUniversity and Johns Hopkins University between 2003 and 2007 could signal areturn to academia. The most recent Fed president to become a professor wasNarayana Kocherlakota from Minneapolis, who left for the economics departmentat the University of Rochester in 2015.

Kocherlakota has notably taken advantage of his post-Fedcareer to provide more unrestrained commentary on Fed policy. For mostpresidents, the question does exist as to whether or not Lockhart will becomemore vocal about his views on the Fed after leaving.

"I can't see him going 'off the range,' so to speak,and taking extreme views one way or another," Raymond James chiefeconomist Scott Brown said. "I think he'll continue to be middle of theroad in terms of policy outlook, economic outlook and things like that."

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It's that brand of steadfast thinking that some in the sixthdistrict, such as Georgia Bankers Association President and CEO Joe Brannen,hope to see in the future. "Dennis has been at the helm of the bank duringthe best and worst times of our industry," Brannen said. "To havesomeone of his confidence to lead the bank through the great recession, wecould not have had a better leader for the sixth district."

He added that Lockhart's demeanor fits the profile of thedistrict, which stretches from the bayous of Louisiana to the mountains ofTennessee.

"That's who we are in the South. That's what the Southlooks like. We're not red, we're not blue, we're centrist people," Brannensaid.