William J McDonough

William J. McDonough, whose 10 years as president of the Federal Reserve Bank of New York included guiding it through the Sept. 11, 2001, terrorist attacks and keeping a major hedge fund’s collapse from setting off a wider financial crisis, died on Tuesday at his home in Waccabuc, N.Y. He was 83. His death was confirmed by his wife, Suzanne Clarke McDonough, who said the cause was heart failure. Mr. McDonough grew up to enjoy a varied career that included overseas work with the State Department, 22 years as an executive at the First National Bank of Chicago and, from 1993 to 2003, the top job at the New York Fed, the largest of the 12 Federal Reserve Banks and the one responsible for regulating financial institutions. It was his handling of the collapse of Long Term Capital Management, a large hedge fund known for making risky bets using enormous sums of borrowed money, that cemented Mr. McDonough’s reputation as a decisive regulatory hand. He also guided the New York Fed through the Asian financial crisis in 1997 and the institution’s preparations for guarding against a so-called Y2K computer-driven market failure at the onset of the year 2000. William Joseph McDonough was born on April 21, 1934, on Chicago’s West Side to first-generation immigrants from Ireland. His three sisters chipped in to pay tuition for his first year at Campion High School in Prairie du Chien, Wis. He finished first in his class four straight years. The distinction earned him admission to the College of the Holy Cross, in Worcester, Mass., where he graduated in 1956. He received a master’s degree in economics from Georgetown University in 1962. Later, he served in the Navy, and then joined the State Department. He arrived at the New York Fed after sitting next to E. Gerald Corrigan, the institution’s president at the time, on a plane in 1992. Mr. Corrigan soon asked him to join the New York Fed as head of markets. A year later, he was named president. After leaving the New York Fed, Mr. McDonough worked as a vice chairman at Merrill Lynch and was chairman of the Public Company Accounting Oversight Board, which oversaw the auditing of public companies. In addition to his wife, Mr. McDonough is survived by three sons, John, Paul and William B.; three daughters, Eileen Tavenner, Fiona McDonough and Alana McDonough; two stepdaughters, Melanie Vere Nicoll and Victoria Michaelis; and 16 grandchildren.