Fed's Stern, critic of bank bailouts, set to retire

By Ros Krasny

WOOSTER, Ohio (Reuters) - Gary Stern, the Federal Reserve's longest-serving regional president and a vocal critic of big bank bailouts, will retire in the summer of 2009, the Minneapolis Fed said on Thursday.

Stern, 64, has made his battle cry the issue of "too big to fail," or the problems created when massive banks or financial institutions are given preferential treatment because of their sheer size or perceived systemic risk.

"It has been truly an honor to spend most of my career working at the Federal Reserve Bank of Minneapolis," Stern said in a statement released by the regional bank.

Stern has led the bank since 1985.

James Hynes, chairman of the Minneapolis Fed's board of directors and executive administrator, will head a committee to conduct a search for Stern's replacement.

Recent buzz within the central bank has been that Christine Cumming, first vice president of the New York Fed, is the front runner to replace Stern as the head of the Fed's Ninth District.

Cumming, 56, was born in Minneapolis. She earned her B.S. and Ph.D. in economics from the University of Minnesota. She joined the Fed in 1979 as an economist in the international research department

She is an alternate voting member of the Federal Open Market Committee and was seen as a short-listed contender for the top New York Fed job ultimately given to William Dudley in January.