There Are Now TWO Federal Reserve Vice Chair Positions That Need To Be Filled

Earlier this week, President Obama nominated Federal Reserve Vice Chair Janet Yellen to be Fed Chair when Ben Bernanke retires in January.

Assuming Yellen gets confirmed by the Senate Banking Committee, her Vice Chair seat will be vacated.

However, the Fed will actually be looking for not one, but two Vice Chairs.

"[T]he Dodd-Frank financial reform legislation requires that a second Fed Vice Chair be named, in addition to the individual who eventually assumes Yellen's current role," said Credit Suisse's Neal Soss. "The responsibility of the second Vice Chair will be to focus on issues of bank supervision."

Not many people are talking about this.

Here's more from Soss:

A little-known provision of the enormous Dodd-Frank financial reform law concerns changes to governance and positions at the Federal Reserve. Buried in Title XI of Dodd- Frank is language creating a new position at the Fed, the Vice Chairman for Supervision. Like the Vice Chairman of the Board, the Vice Chairman for Supervision will have a term of four years.

While the Vice Chairman of the Board is charged with serving in the absence of the Chairman, the law states that the Vice Chairman for Supervision "shall develop policy recommendations for the Board regarding supervision and regulation of depository institution holding companies and other financial firms supervised by the Board, and shall oversee the supervision and regulation of such firms."

One natural candidate for the new vice chairmanship position is Fed Governor Tarullo, who has carved out bank supervision as his specialty on the Fed Board. We expect the new vice chairman to be named sometime in 2014.

This just scratches the surface in terms of changes at the Fed.

"Another seat was vacated when Governor Duke left the Fed at the end of August," added Soss. "And Governor Raskin, who abstained from the September 18 FOMC vote, is about to leave the Fed to join the Treasury. So, that makes three of seven slots to be filled."