In a speech at the Brookings Institution, Federal Reserve Board Governor Christopher J. Waller set out a case for further modernizing Federal Reserve System operations by standardizing and centrally leading more Reserve Bank functions, while keeping genuinely district-specific activities local. He framed the issue as distinguishing between work that must remain geographically rooted in a Federal Reserve District and work that can be run more efficiently as systemwide lines of business. Waller argued that regional economic intelligence, community engagement, supervision of state member banks and bank holding companies, and lending to depository institutions benefit from local presence, while platform-based functions such as payments, information technology, fiscal agency, HR systems, payroll and benefits administration, finance and accounting, procurement, vendor management, and facilities should increasingly be managed for the System as a whole. He described two models: centralized System leadership over major support functions while maintaining the existing physical footprint, and a more far-reaching approach that adds physical consolidation of selected functions into a small number of operations centers, with outsourcing where cost savings warrant it. He also called for a shift in operational governance toward greater delegation of authority to system function leaders and away from consensus-based decisionmaking across 12 Reserve Banks.
Federal Reserve Board 2026-04-21
Federal Reserve Board’s Waller outlines options to centralize Reserve Bank operations and move away from consensus-based governance
Federal Reserve Board Governor Christopher J. Waller, in a Brookings Institution speech, urged modernizing Federal Reserve operations by standardizing and centrally leading more Reserve Bank functions while keeping genuinely district-specific activities local. He proposed centralizing platform-based support functions, potentially consolidating some into a small number of operations centers with outsourcing where cost-effective, and called for governance changes that delegate more authority to system function leaders and reduce consensus-based decision-making across the 12 Reserve Banks.