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Boston Fed President Minehan Plans To Retire This Year

Boston Federal Reserve President and Chief Executive Cathy Minehan said she plans to retire from the bank this year.

Minehan, who is set to become a voting member of the Fed's interest-rate setting Federal Open Market Committee, said she will remain until a replacement is found.

According to CNBC's Steve Liesman, Minehan's departure is likely to be the first of several changes at the Fed this year. He said Chicago Federal Reserve President Michael Moskow is likely to retire this summer and St. Louis Federal Reserve President William Poole could leave by the end of this year.

Two posts - a Fed board seat and the presidency of the Atlanta Fed - are already open.

Minehan, who has been with the Federal Reserve Bank for about 37 years, became the first woman to head the Boston Fed in 1994. Of the 17 current Fed policymakers, only three are women.

She began her career with the Federal Reserve Bank of New York in 1968.

Minehan said she wanted to "move on in the interests of broadening and diversifying" my career. However, she has "no specific future plans" at this time, she said.

An expert on payment systems, she is a member of the Payment System Policy Advisory Committee, a point group of Reserve Bank Presidents and Governors that considers issues related to systemic risk in national and international payment systems.

In recent days, investors have been weighing comments by Minehan and other Fed policymakers for any clues to where interest rates could be heading.

Both New York Fed President Timothy Geithner and Fed Governor Susan Bies have made speeches today.

Both Geithner and Bies are voting members of the FOMC, but neither addressed their views on the economy or monetary policy in their comments.

Instead, Geithner address issues impacting the global economy. He said, a large accumulation of dollars in official reserves has helped keep U.S. interest rates low and pushed U.S. asset prices higher, but it could have "less favorable implications."

"If they are large enough, they have the potential to alter or distort current decisions about investment and consumption in a way that could be detrimental to our longer-run growth
prospects," Geithner said in his speech at the Council on Foreign Relations.

"And they are important because they work to mask or dampen the effects on risk premiums in financial markets that we might otherwise expect to be associated with the expected trajectory of the fiscal and external imbalances in the United States."

Separately, Bies said looser underwriting standards were partly responsible for recent rises in late mortgage payments and that lenders should tighten risk management practices.

Bies was speaking to a risk management conference sponsored by the National Credit Union Administration and was referring to increasing delinquencies among so-called subprime borrowers who are considered higher risks.

"Many industry observers believe the poor performance of more recently originated subprime loans is due primarily to looser underwriting standards, including limited or no verification of borrower income and high loan-to-value transactions," Bies said. She added that lenders need to be "specially diligent" when making such loans.