Silas ‘Si’ Keehn, chief of Federal Reserve Bank of Chicago, dies at 85

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Banker Silas Keehn, former chief of the Federal Reserve Bank of Chicago | Provided photo

Silas Keehn’s calm foresight contributed to the nation’s economic well-being when he was president of the Federal Reserve Bank of Chicago from 1981 to 1994, his successors say.

In 1979, Mr. Keehn left Mellon Bank of Pittsburgh to join Chicago’s Pullman Inc., where some credit him with fending off one of the first hostile takeovers of the 1980s. In 1981, he was tapped to head the Chicago Fed, which covers Iowa and parts of Illinois, Indiana, Michigan and Wisconsin.

As one of the nation’s 12 regional chiefs of Federal Reserve offices, Mr. Keehn served on the Federal Open Market Committee, which sets a target for interest rates. He worked with two chairs of the Federal Reserve of the United States, Paul A. Volcker and Alan Greenspan.

The Federal Reserve Bank of Chicago helps set monetary policy. It regulates banks, provides electronic payment technology and processes checks. The Chicago Fed also is responsible for removing old currency from circulation and replacing it with new bills ordered from the U.S. Treasury.

Mr. Keehn “contributed to the well-being of the national economy in many ways, primarily serving as a member of the Federal Open Market Committee formulating national monetary policy,” said Charles Evans, current president and CEO of the Federal Reserve Bank of Chicago. “He also oversaw a complete renovation of our main building in Chicago in the 1980s.”

“The one area that he was very concerned about — and I’d say he was a man ahead of his time — was the security of the I.T. systems,” said Michael Moskow, Mr. Keehn’s immediate successor as head of the Chicago Fed. He led an effort “to make sure the systems were secure.”

“Si” Keehn “proved to be an excellent choice to lead the Federal Reserve Bank of Chicago during the decade of the ’80s,” said William C. Conrad, the Chicago Fed’s former chief operating officer and first vice president.

Mr. Keehn grew up in New Rochelle, New York, until his father, Grant, moved to the Midwest to become a negotiator for supply contracts for the U.S. Army, a role that found him headquartered at Chicago’s Federal Reserve building, 230 S. La Salle, where his son would later work. A native of Kenilworth, Grant Keehn had been a president of the Equitable Life Assurance Society of the United States.

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Silas Keehn | Provided photo

Young Si attended Sears School in Kenilworth and Deerfield Academy in Massachusetts. He received a bachelor’s degree in government from Hamilton College, the Clinton, New York, school named for Alexander Hamilton, the first secretary of the Treasury.

He interrupted his graduate studies at Harvard to spend three years in the Navy during the Korean War era, serving on the USS Goodrich. “He was 24, 25 and in charge of all these people and a lot of weapons,” said his son, Peter. “He really got the sea in his system.” Mr. Keehn loved sailing his boat during family vacations on Nantucket.

When he died Saturday at the Mather in Evanston, he had a painting of the USS Goodrich on his wall. Mr. Keehn was 85.

After earning his MBA at Harvard, he and his wife of 61 years, Marcia, settled in Pittsburgh while he worked at Mellon Bank. In 1980, he moved back to the Midwest to head Pullman. He and Marcia Keehn bought a home in Winnetka.

When the Pullman takeover bid happened, Peter Keehn said, “He quickly pulled together a group of advisors who went on to became very famous takeover-defense people — [First Boston investment bankers] Bruce Wasserstein and Joe Perella — who helped him figure out a better solution, better for the shareholders.”

His Chicago Fed tenure also saw the 1984 near-collapse and federal bailout of Continental Bank.

During the stock market crash of 1987, “He was a great advocate for the Chicago markets,” said William J. Brodsky, then head of the Chicago Mercantile Exchange.

“He was knowledgeable and very, very supportive” of the CME’s stance that futures markets were not responsible for the crash. “He was our voice at the Fed in Washington,” said Brodsky, now chief of the Chicago Board Options Exchange.

Mr. Keehn stepped down from the Chicago Fed shortly before he turned 65, its mandatory retirement age.

Next, he became a director of a Netherlands bank, ABN Amro, Peter Keehn said. “They only had one American on their board of directors, and that was my dad. He was on the board of Kewaunee Scientific Corporation and on the board of the Chicago Board Options Exchange and the National Futures Association.” He also worked to support Hamilton College and Rush University Medical Center.

He enjoyed Homer’s ice cream and “Dutch Baby” pancakes from Walker Brothers in Wilmette.

Mr. Keehn also is survived by his daughters, Libby Keehn Lewis and Britta Keehn Scott; his sisters, Nora Keehn and Gretchen Thomsen; two half-sisters, Dorka Keehn and Fruzsina Keehn Sherry; and eight grandchildren. A memorial service is planned at 11 a.m. April 2 at Kenilworth Union Church.

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