President Anthony M. Santomero reflects on the economic challenges and changes during his tenure as president over the past six years and summarizes some of the Bank’s accomplishments.

Anthony M. Santomero

English

Research Papers in Economics

O
by Anthony M. SAntoMero
A Farewell from President Santomero
Anthony M. Santomero, President,
Federal reserve bank of Philadelphia 
Q1  2006 Business Review  1 www.philadelphiafed.org
n March 31, 2006, President Anthony M. 
Santomero will step down as president of the 
Federal reserve bank of Philadelphia. In this 
quarter’s message—his last—he reflects on the 
economic challenges and changes of the past six years and 
summarizes some of the bank’s accomplishments.
this will be my final contribu-
tion to “the third Dimension” as 
president of the Federal reserve bank 
of Philadelphia. My tenure as a Fed 
president has spanned an especially in-
teresting period. I came to the Federal 
reserve bank of Philadelphia in the 
summer of 2000, on the tail end of one 
of the greatest bull markets in finan-
cial history and in the 10th and final 
year of the longest economic expan-
sion in U.S. history. We then saw an 
unprecedented series of disturbances: 
a terrorist attack on American soil, 
two wars, numerous financial scandals, 
even major natural disasters. Mean-
while, longer term trends, such as the 
blossoming of the Internet age and the 
globalization of markets, continued to 
transform the economic and financial 
landscape.  All of these things chal-
lenged the Fed—as monetary policy-
maker, as banking regulator, and as 
payment system provider.  
During this time, the Federal re-
serve was under the chairmanship of 
Alan Greenspan, a man who has been 
called the greatest central banker who 
ever lived. It has been my privilege to 
work toward meeting these challenges 
both as a member of the Federal open 
Market Committee (FoMC) and as 
president of this bank.
Along the way, I have shared my 
perspectives on many of these issues 
with you here in the Business Review.  
I hope you have found them interest-
ing. Indeed, I hope you have found 
— and will continue to find — all of 
the articles we bring to you through 
the Business Review worthwhile.  they 
represent our best effort to share with 
you the work of our dedicated staff of 
economists in the realms of economic 
policy, banking and payments, and fi-
nancial and regional economics. More 
broadly, the Business Review is one way 
in which our bank achieves what I see 
as its fundamental goal: to serve as a 
center of central bank knowledge and 
capability.
I want to take this opportunity to 
summarize some other important ways 
in which the bank has been building, 
sharing, and applying knowledge to 
contribute to the Fed's effectiveness as 
the nation's central bank.
In the area of economic research 
and policy, we have built a more 
vibrant research enterprise.  our 
economists are producing high-quality 
research on issues important to central 
banking and sharing that work with 
others via participation in professional 
conferences across the country and 
around the world. In addition, we have 
also increased the number of confer-
ences and workshops that we have 
organized here at the bank. 
Indeed, our palpable presence at 
the nexus of research and policy is 
perhaps best embodied in our Philadel-
phia Fed Policy Forum.* this remark-
ably successful annual event brings 
together leading academics, policy-
makers, and market economists for de-
bate and discussion of relevant macro-
economic and monetary policy issues.  
* For a summary of the 2004 Policy Fourm, see 
the Third Quarter 2005 issue of the Business 
Review.2   Q1  2006 Business Review   www.philadelphiafed.org
We are honored that one commentator 
has called it the “Jackson hole of the 
east,” referring to the highly regarded 
annual conference of economists held 
in Jackson hole, Wyoming.  
All of these activities help deepen 
the Fed’s understanding of monetary 
policy and its impact on the national 
economy. on a personal level, the 
work of our research Department 
has served me well—challenging my 
thinking as an economist and help-
ing me sharpen my contributions to 
the discussions at the FoMC. Let me 
add that participating in the FoMC 
discussions in Washington has truly 
impressed upon me the gravity of the 
Fed’s role in our nation’s economy.  
the bank has been active in other 
areas of central banking as well. the 
Philadelphia Fed has long been a Sys-
tem leader in the payments arena. We 
operate one of its premier check pro-
cessing centers, and recently we have 
been named as a System consolidation 
site, absorbing the check volume from 
new york’s east rutherford opera-
tions Center. At the same time, we are 
advancing the System’s knowledge of 
the evolving payments system with the 
establishment of our Payment Cards 
Center. And we are playing a key role 
in modernizing government payments 
through the services we provide to the 
U.S. treasury.  
In the area of bank supervision, 
we established a unit in our Supervi-
sion, regulation and Credit Depart-
ment to analyze retail credit risk. 
now the System has charged us with 
developing the strategy for imple-
menting this part of the new basel 
II capital requirements. our bank is 
also now responsible for implement-
ing the System’s new discount window 
lending policy and overseeing requisite 
upgrades to our technology.  
At the same time, our bank has 
made strong contributions to eco-
nomic education and financial literacy. 
We are System leaders in economic 
education and have developed finan-
cial literacy curricula used locally and 
nationally. our programs to promote 
financial literacy, improve access to 
credit, end predatory lending, and 
foster urban development continue to 
make a real difference in our commu-
nities. 
to increase public understand-
ing of the Fed and its role, our bank 
opened its doors to visitors on In-
dependence Mall with the “Money 
in Motion” exhibit. this interactive 
financial exhibit has brought over 
67,000 national and international 
visitors to our bank since it opened. 
We also sponsored and hosted roughly 
572 events in our new state-of-the-art 
conference center in its first year of 
operation.  
over the six years of my tenure, 
our bank has strived to become an 
even more important part of our Phila-
delphia community and to become 
an integral part of economic policy 
discussion in our District and the na-
tion. our bank has had the opportu-
nity to contribute to such discussions 
throughout our region and to establish 
its expertise in monetary policy on the 
national stage. 
In my view, the Philadelphia Fed 
has established itself as an outstand-
ing component of the Federal reserve 
System. As part of the nation’s central 
bank, we are an organization with an 
important niche in public service and a 
stellar reputation for quality and cred-
ibility. I am confident that the bank 
will continue to move forward under 
its new leadership and will remain 
steadfastly committed to the strength 
and growth of the third District’s 
economy. 
In closing, I would like to ex-
press my gratitude for having had the 
pleasure of national service in a truly 
outstanding institution and for the 
opportunity to work under Chairman 
Greenspan. With Greenspan’s depar-
ture, President bush has made an ex-
cellent choice in ben bernanke as our 
new Chairman. I am confident that 
the reins of the Federal reserve are in 
good hands. I wish him, my colleagues, 
and our readers the very best. 
As part of the nation’s central bank, we are an 
organization with an important niche in public 
service and a stellar reputation for quality and 
credibility.
B R

A farewell from President Santomero

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A farewell from President Santomero

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