Federal Reserve Governor Christopher Waller set out a proposal on Tuesday to reshape how the Federal Reserve System organizes certain back-office and support functions across its 12 regional Reserve Banks. Speaking at the Brookings Institution in Washington, Waller said the Fed should consolidate key operational activities - including human resources, finance, procurement and technology - into national lines of business rather than leaving them under the local direction of individual Reserve Banks.
Waller argued that the current arrangement allows each Reserve Bank to manage operational infrastructure from what he described as a Bank mindset instead of a System mindset. He urged a transition toward more centralized operations so that the System as a whole, rather than each separate Reserve Bank, would set and run those infrastructure and support services.
In prepared remarks, Waller asked for a reorientation of how operational responsibilities are distributed across the Federal Reserve System. His comments focused specifically on consolidating administrative and technical functions, listing human resources, finance, procurement and technology as the principal areas he believes should be organized nationally.
The governor did not speak about the economic outlook or monetary policy decisions. His remarks came during the blackout period that precedes the Fed's next monetary policy meeting, when officials generally refrain from commenting on policy or the economic outlook.
Context and constraints
The remarks at Brookings proposed a structural change in the internal management of the Federal Reserve System, emphasizing a shift from decentralized, bank-level control of operations toward centralized, systemwide management of select business functions. Beyond the call for consolidation of the named functions, Waller's prepared text did not specify implementation steps, timelines or additional operational details.
Implications highlighted in the remarks
- Waller emphasized a need to move away from individual Reserve Bank control of operational infrastructure.
- The functions he identified for centralization were human resources, finance, procurement and technology.
- He delivered these comments while avoiding discussion of economic or interest rate outlooks because officials are in the pre-meeting blackout period.
The proposal, as described in Waller's prepared remarks, outlines a conceptual change in how the Fed manages core support functions across its regional banks but does not provide further specifics on execution. The address was confined to the operational reorganization he believes is necessary and did not touch on other topics, including monetary policy decisions or forecasts.