Donald Kohn, the second-highest ranking official at the Federal Reserve, said Monday he would step down at the end of his four-year term in June, bringing to three the number of vacancies on the central bank's seven-member board of governors.
Kohn, who's been with Fed for four decades and vice chairman since 2006, was instrumental with Chairman Ben Bernanke in shaping the central bank's response to the financial crisis and recession. His retirement paves the way for the White House to put its stamp on the Fed's board of governors as it grapples with the withdrawal of the extraordinary stimulus measures enacted over the last two years.
"At no time since the Great Depression have this ability and dedication been tested as they have been over the past several years," wrote Kohn in his resignation letter. "I am confident that history will judge the Federal Reserve, under the leadership of Chairman Ben Bernanke, to have met these challenges with great speed, imagination, and effectiveness."
Kohn, 67, was appointed to the Fed board of governors by President George W. Bush in 2002. He began his career as an economist with the Federal Reserve Bank of Kansas City in 1970 while studying for his Ph.D. in economics, which he received from the University of Michigan the following year.
"The Federal Reserve and the country owe a tremendous debt of gratitude to Don Kohn for his invaluable contributions over 40 years of public service," said Bernanke in a statement. "Most recently, he brought his deep knowledge, experience, and wisdom to bear in helping to coordinate the Federal Reserve's response to the economic and financial crisis."
Before joining the board Kohn served on the Fed's staff as adviser to the board for monetary policy, secretary of the Federal Open Market Committee and director of the Division of Monetary Affairs, among other positions.