Federal Reserve general counsel Scott Alvarez, a key behind-the-scenes figure at the central bank who played a major role in its response to the financial crisis, will step down this year, the Fed announced Wednesday.
Alvarez, who has led the Fed’s legal division for 12 years, doesn’t have a major public profile, but he has shaped Fed regulatory policy through both the Ben Bernanke and Janet Yellen years, including some of the most famous and controversial bailout efforts. In recent years, he has come under some scrutiny from Congress for his role in divisive actions by the central bank.
“Scott advised successive chairs, including myself, with deep expertise and utmost integrity,” Fed Chairwoman Janet Yellen said. “I am enormously grateful for his wise counsel, calmness and good humor during times of stress, and, above all, his intense dedication to the public interest served by the Federal Reserve.”
Alvarez helped design the Fed’s 2008 bailout of insurer American International Group, the terms of which were later endlessly debated by commentators who saw the rescue as a backdoor bailout of Wall Street and which later became the subject of a high-profile court case.
More recently, Alvarez has come under scrutiny from Sen. Elizabeth Warren, D-Mass., for weighing in against a regulation that the liberal senator fought hard to keep in place. House Republicans, too, have requested access to Alvarez’s communications in a probe of a leak from the Fed’s monetary policy committee, for which Alvarez is also the top lawyer.
Alvarez, who is retiring, has been described as the “power behind the throne” at the Fed, providing continuity and shaping the central bank’s institutional viewpoint. Increasingly, congressional Republicans have criticized the Fed’s culture as secretive and unaccountable, as well as partisan.
