Waller’s Push to Shake Up Fed Stirs Fears Over Regional Autonomy

A proposal to streamline Federal Reserve operations has raised alarm inside the sprawling institution over whether it would undermine the autonomy of its 12 regional banks, just as the central bank braces for broader changes from its new chairman, Kevin Warsh.

The initiative – led by Warsh’s one-time rival for the top job, Governor Christopher Waller – aims to centralize certain back-office functions, such as human resources and information technology, at individual reserve banks rather than duplicate them across the Fed’s regional outposts. The goal, Waller said in speeches this spring, is to better serve taxpayers and keep up ...