William Joseph McDonough
William McDonough | |
|---|---|
| Born | 21 April 1934 Chicago, Illinois, U.S. |
| Died | 22 January 2018 (aged 83) Waccabuc, New York, U.S. |
| Occupation(s) | Economist, banker |
| Years active | 1956–2009 |
| Known for | President and CEO of the Federal Reserve Bank of New York (1993–2003), chairman of the Basel Committee on Banking Supervision |
William Joseph McDonough (April 21, 1934 – January 22, 2018) was a prominent American economist who led the Federal Reserve Bank of New York as its president and CEO from 1993 until 2003. In addition to this role, he served on the board of the Bank for International Settlements and chaired the Basel Committee on Banking Supervision.
Prior to his Federal Reserve leadership, McDonough dedicated six years to the U.S. State Department and spent 22 years with First Chicago Corporation. After concluding his service at the Fed, he became the inaugural chairman of the Public Company Accounting Oversight Board for a three-year term, followed by a position as vice chairman and senior advisor to the CEO at Merrill Lynch from 2006 until his retirement in 2009.
Early life and education
McDonough was born in 1934 on Chicago’s West Side to parents who had emigrated from Ireland. Orphaned by age 11, he was raised by an aunt and supported himself through newspaper delivery before attending Campion High School in Wisconsin, where he consistently ranked first academically throughout his four years.
He obtained his undergraduate degree from the College of the Holy Cross in 1956 and later earned a master’s degree in economics from Georgetown University in 1962.
Early career
From 1956 to 1961, McDonough served in the U.S. Navy, gaining valuable experience aboard a destroyer, stationed at Pearl Harbor, and teaching at the U.S. Naval Academy. During this period, he also completed his master’s degree through evening classes.
Between 1961 and 1967, he was employed by the U.S. State Department, concentrating on Latin American affairs which included a diplomatic assignment in Uruguay. He became proficient in both Spanish and French during this time.
In 1967, McDonough joined First Chicago Corporation and its affiliate, First National Bank of Chicago, bringing his economic acumen and international background to the institution. His early assignments took him to Paris and London before returning stateside where he advanced to vice chairman by 1986. After a total of 22 years with First Chicago, he retired in 1989 upon concluding that ascending to CEO was unlikely.
Following this phase, McDonough engaged in consultancy work and philanthropic endeavors prior to his appointment at the Federal Reserve.
Federal Reserve Bank of New York
In 1992, McDonough was appointed executive vice president and head of markets at the Federal Reserve Bank of New York, where he managed foreign exchange operations along with domestic market activities, including oversight of the bank's open market operations.
He assumed the role of president and CEO of the New York Fed from July 1993 through July 2003. Concurrently, he was vice chairman and a permanent member of the Federal Open Market Committee, responsible for setting U.S. interest rates.
McDonough also contributed as a board member at the Bank for International Settlements and chaired the Basel Committee on Banking Supervision between 1998 and 2003. During his chairmanship, the McDonough ratio was introduced—a revision to risk-weighted capital standards that later became incorporated into the Basel II framework launched in 2004.
Throughout his leadership tenure, McDonough managed significant financial crises such as the 1997 Asian financial crisis, ensuring uninterrupted credit flows to South Korea. He oversaw preparations addressing potential disruptions related to Y2K and coordinated market stabilization efforts following the September 11 attacks. Additionally, he endorsed chairman Alan Greenspan’s initiative beginning in 1994 to publicly disclose Federal Reserve interest rate decisions.
His most prominent crisis management involved orchestrating a private-sector rescue in 1998 for hedge fund Long-Term Capital Management, whose collapse posed a systemic risk to financial markets.
McDonough was an outspoken voice on matters impacting business and finance, frequently criticizing excessive CEO pay packages, escalating risk-taking behaviors on Wall Street, and widening income inequality within the United States during his Federal Reserve speeches.
Career after the Federal Reserve
Following his departure from the New York Fed in 2003, McDonough was named the inaugural chairman of the Public Company Accounting Oversight Board, a nonprofit regulatory organization established under the Sarbanes-Oxley Act of 2002. This board was tasked with supervising audits of publicly traded companies and broker-dealers. He stepped down from this position toward the end of 2005.
In January 2006, McDonough took on the role of vice chairman at Merrill Lynch and acted as a senior advisor to CEO Stanley O'Neal, concentrating on expanding business relations with governments and financial institutions. He concluded his career at Bank of America, which had acquired Merrill Lynch, retiring at the close of 2009.
Additional roles
McDonough held the position of vice chairman at the Council on Foreign Relations, where he had been serving as a director since 1995.
Between 1996 and 2000, he led as chairperson of the Economic Club of New York and, in 2004, was appointed to the board of advisors for the Yale School of Management.
He also chaired the Investment Committee for the United Nations Joint Staff Pension Fund and co-chaired the United Nations Association of the United States of America (UNA-USA). Furthermore, he was an emeritus member of the Group of Thirty, a distinguished financial advisory group headquartered in Washington.
In addition, McDonough contributed as a board member for the New York Philharmonic Orchestra.
Personal details
McDonough passed away on January 22, 2018, at age 83, at his residence in Waccabuc, New York, located in Westchester County. He is survived by his wife, Suzanne Clarke McDonough, along with six children from an earlier marriage.
