Federal Reserve Governor Christopher Waller proposed consolidating back-office operations across the 12 regional Reserve Banks in a speech at the Brookings Institution on April 21. Waller chairs the Board of Governors' committee overseeing Reserve Bank activities. He argued that decisions about IT architecture, procurement strategy, and facilities standards should be made at the system level rather than determined separately by each district.
The first model would place each major support function under a single system-level senior leader while keeping local staff at their current locations. The second model would physically consolidate functions that do not require a local presence into a small number of sites. Waller said the full gains in cost, resilience, cybersecurity, and talent are achievable only under the second model.
The Federal Reserve Banks collectively operate the Fedwire Funds Service and FedNow Service as part of their technology infrastructure. Any consolidation of IT governance across the 12 districts would affect how these payment systems are maintained and upgraded. The proposal arrives during a leadership transition at the Fed. Jerome Powell's term as chair expires May 15. The Senate Banking Committee is scheduled to vote on Kevin Warsh's nomination on April 29.