NEW YORK—The Federal Reserve Bank of New York today announced that Sarah Dahlgren will be appointed head of Bank Supervision effective January 1, 2011, and that Roseann Stichnoth will succeed Ms. Dahlgren as head of the Special Investments Management Group (SIMG), effective September 1, 2010.
“With the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Federal Reserve’s mandate has been broadened to ensure financial stability. This includes tough curbs on excessive risk-taking, an expanded set of major financial institutions subject to our supervision, and enhanced oversight to guard against the build up of systemic risks,” said William C. Dudley, president and chief executive officer of the New York Fed.
“We are determined to apply the lessons of the crisis in a way that strengthens our supervision and oversight and ensures we have a sound and well-functioning financial system able to meet the needs of creditworthy borrowers throughout the economy. Sarah is a proven leader who has been battle-tested in the crisis. I will look to her to push forward the changes already underway in the Bank Supervision Group and to ensure that our supervisory practices keep pace with the ongoing evolution of the financial system.”
Ms. Dahlgren has been in charge of the New York Fed’s SIMG since January 2010. She will move to Bank Supervision in September and will spend the remainder of the year working with William Rutledge, the current head of Bank Supervision, who has announced his intention to retire at year end, before taking over on January 1, 2011.
“Working with colleagues at the Board and other regulators, I am looking forward to developing and implementing important enhancements to how we supervise firms,” said Ms. Dahlgren. “We need to better understand the risks they are taking, the strength of their governance and controls and their vulnerability to systemic shocks—and to respond forcefully as needed.”
The appointment comes as the Federal Reserve System is implementing an enhanced framework for supervising large banking organizations. The framework integrates the insights and analyses generated across a range of disciplines in order to bring a systemic perspective to the supervision of both individual firms, as well as to the process of identifying broader risks to financial stability.
Ms. Stichnoth is being promoted to executive vice president and will succeed Ms. Dahlgren as head of the Special Investments Management Group. She is currently a senior vice president in the New York Fed’s Markets Group in charge of the Term Asset-Backed Securities Loan Facility (TALF) program that provides financing for consumer and business credit.
Mr. Dudley said, “Roseann understands a wide range of markets, takes a rigorous approach to analyzing policy options and has a sharp eye for risk. She is well positioned to manage our credit to AIG and the Maiden Lane vehicles to ensure the best possible outcome for the public.”
The Special Investments Management Group, formed in January 2010, is responsible for managing the investments resulting from the special lending facilities created in the course of stabilizing the American International Group (AIG) and Bear Stearns.
SIMG has two business lines: AIG Relationship Management and Investment Support Office, which is responsible for the Maiden Lane facilities, as well as support functions. The AIG monitoring team reviews AIG’s financial condition, monitors the use of cash and exercises the New York Fed’s contractual consent rights over decisions that may impact the company’s ability to repay its loan. The team, in coordination with the Treasury, works with AIG management in ongoing efforts to implement the company's business and repayment strategy.
Ms. Stichnoth said, “With AIG preparing for the IPO of its Asian business AIA—a move that should allow it to repay a substantial part of its debt to the public—and the market value of the Maiden Lane portfolios improving, it is an exciting time to take on this challenge. I look forward to working closely with all the important AIG stakeholders and the Maiden Lane portfolio managers.”
Sarah Dahlgren was named executive vice president and head of the newly formed Special Investments Management Group in January 2010. Since September of 2008, Ms. Dahlgren had been in charge of the AIG relationship team, working alongside the Board of Governors and the Department of the Treasury to monitor AIG, with the goal of stabilizing it and obtaining full repayment of government assistance.
Prior to that, Ms. Dahlgren was responsible for the relationship management function in the Bank Supervision Group, with oversight responsibility for the Group’s portfolios of domestic and foreign banking organizations. Previously, Ms. Dahlgren was responsible for the Group’s information technology and payments systems exam programs, as well as its Year 2000 readiness efforts.
Since joining the Bank in 1990 as an examiner, Ms. Dahlgren has held various positions within the Bank, including having responsibility for the Bank’s credit risk management function.
Prior to 1990, Ms. Dahlgren was responsible for budget and policy at the Substance Abuse Intervention Division at Riker’s Island, part of the New York Department of Corrections. Ms. Dahlgren holds a bachelor’s degree from Cornell University and a master’s degree from Duke University.
Roseann Stichnoth was a senior vice president in the Markets Group prior to her promotion to executive vice president and head of the Special Investments Management Group. She joined Markets early in 2009 to build out and lead the TALF team. TALF was one of the principal special facilities instituted by the Federal Reserve in response to the financial crisis.
Ms. Stichnoth joined the New York Fed in 1977 and spent five years as a bank examiner. She then left the Bank to accept a position with Marine Midland Bank, N.A. (now part of HSBC), where she held various management positions related to domestic and international credit.
After 10 years in the private sector, she rejoined the New York Fed as a senior bank examiner in the international banking department. Since then, Ms. Stichnoth has held various management positions in bank supervision, human resources, financial management and operations.
Ms. Stichnoth holds a bachelor’s degree in business administration from the University of Massachusetts at Amherst and an MBA from the New York Institute of Technology.