In a release, Denis Hughes, the Fed's deputy chairman and a member of the board's search committee, points out that Dudley led the bank's markets group "at a crucial time and helped conceptualize, develop and manage many of the Fed's responses to extraordinary financial conditions. Under his leadership, the New York Fed will continue to work closely with the Treasury and the board of governors in dealing with the economic situation we confront." Dudley was EVP of the Fed's markets group before being named to the top post.

"The New York Fed, standing at the critical intersection of the financial markets and the banking system, has a leading role to play in assisting in the reform of the architecture of the US and global financial system to ensure that what has transpired over the past year can never occur again," says Dudley in a statement.

Before joining the Fed two years ago, Dudley was a partner and managing director at Goldman, Sachs & Co., serving for a decade as the firm's chief US economist. At Goldman he held a variety of positions including senior foreign exchange economist. Prior to his Goldman tenure, Dudley's work focused on regulatory and payments issues as a VP at Morgan Guaranty Trust Co., and as an economist in the financial studies department at the board of governors of the Federal Reserve System.