The Fed's General Counsel Is Retiring

Who can forget the infamous 2009 exchange between Alan Grayson and the Fed's General Counsel Scott Alvarez in which the Florida Democrat unleashed on the Fed:

  • Alan Grayson: I would like to know whether it is within the Federal Reserve's legal authority to try to manipulate the stock market or the futures market.
  • Federal Reserve GC Scott Alvarez: I don't believe the Federal Reserve tries to manipulate the stock market.
  • Alan Grayson: Does the Federal Reserve actually possess all the gold that's listed on their balance sheet.
  • Scott Alvarez: Yes...
  • Alan Grayson: Who actually executes the trades for the Federal Reserve in the markets?
  • Scott Alvarez: The Federal Reserve Bank of New York, which executes trades through Primary Dealers.
  • Alan Grayson: Can you name one Primary Dealer?
  • Scott Alvarez: JP Morgan Chase
  • Alan Grayson: Do you mind if we have a GAO audit to see if there has been front-running or insider trading by them? Do you mind? Is that ok with you?
  • Scott Alvarez: I am not sure if I have that authority...

Well, after carrying the Fed through turbulent times, the Federal Reserve's general counsel Scott Alvarez is finally out. In a statement released by the Fed on Wednesday, it announced that that Alvarez will retire this year after a 36-year career at the central bank. In his dozen years as the Fed’s top lawyer, Mr. Alvarez quietly became one of the central bank’s most influential officials the WSJ reported. His reach was so broad that he has sometimes been referred to as the eighth Fed governor, or “Governor Alvarez.”

In addition to his back and forth with Grayson, he drew the attention of lawmakers in 2014 when he suggested at a conference that Congress reconsider a Dodd-Frank rule known as the “swaps push-out” rule that required banks to spin off certain  derivatives trading activities into separate units that wouldn’t have access to the government safety net. The rule, he said, had been drafted “in the middle of the night.”

His comment led Sen. Elizabeth Warren (D., Mass.) to rebuke the Fed lawyer during a congressional hearing with Fed Chairwoman Janet Yellen in 2015. Fed staffers “should not be picking and choosing which rules to enforce based on their personal views,” Ms. Warren told Ms. Yellen.


Ms. Yellen said she had no intention of trying to alter the rules contained in Dodd-Frank and later released a statement expressing confidence in Mr. Alvarez’s “expert advice and counsel.”

In 2015, Mr. Alvarez was in charge of an investigation into an alleged leak of sensitive market-moving information on monetary policy in 2012. “Scott advised successive chairs, including myself, with deep expertise and utmost integrity,” Ms. Yellen said in a statement Wednesday. “I am enormously grateful for his wise counsel, calmness and good humor during times of stress.”

The Fed said it would begin a search for his successor.

Ful statement below:

Scott G. Alvarez, General Counsel, will retire later this year after nearly 36 years of service to the Federal Reserve Board, including more than 12 years as head of the Legal Division. The Board will begin a search for his successor.


Mr. Alvarez, who also serves as General Counsel of the Federal Open Market Committee, was a key participant in crafting the Federal Reserve's response to the financial crisis and in implementing the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. He advises the Board on a wide variety of legal and related policy issues, including issues under the Federal Reserve Act and a host of banking laws, and has been a liaison in working with other financial regulatory agencies, congressional committees, and other central banks.


"Scott advised successive Chairs, including myself, with deep expertise and utmost integrity," said Chair Janet L. Yellen. "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."


Mr. Alvarez began his career at the Board in 1981 as a staff attorney. He became a senior attorney in 1985 and was named to the official staff, as Assistant General Counsel, in 1989. He was named General Counsel in July 2004. He earned a B.A. in economics from Princeton University in 1977 and a J.D. from Georgetown University Law Center in 1981.


The Legal Division provides legal analysis and counsel in support of Board statutory and regulatory responsibilities. The focus of the effort is upon the preparation, legal interpretation, and distribution of information concerning statutes, rules, regulations, Board decisions, interpretations, and proposed legislation.