Donald Kohn, Federal Reserve Vice Chairman, Will Retire in June

Federal Reserve vice chairman Donald Kohn said Monday that he would retire from the seven-member board when his term expires in June, the New York Times reports. The departure of Kohn, who played a significant role in shaping the Fed's response to the 2008 financial crisis, will increase the number of vacancies on the board to three, allowing the Obama administration to exert considerable influence over U.S. monetary policy.

The White House said Kohn's decision was "his alone" and that President Obama will name a successor before his term as vice chairman ends on June 23. Kohn could have elected to remain on the board until 2016.

The board has traditionally needed five members to operate, but after the 9/11 terrorist attacks, Congress moved to allow the Fed to act with fewer than five in "unusual and exigent circumstances." That power was invoked in 2008 when the board voted 4-0 to extend credit to JPMorgan Chase for the purchase of Bear Stearns.

Congress has been considering creating a "resolution authority" to oversee the dismantling of giant, financially critical institutions and to remove the pressure to engineer individual bailouts from the Treasury and the Federal Reserve.