The new chairman of the Federal Reserve Branch of Los Angeles is a lady, which isn’t such great shakes nowadays, except this lady shakes great.

    Anne Evans, matriarch of San Diego’s hospitality industry and a retired director of San Diego’s late San Diego Trust & Savings Bank, serves as San Diego’s influence on the nation's monetary policy and administration.

    Her family's money and industry built and operate the Bahia and Catamaran hotels on Mission Bay, and maintain the Cabrillo Square apartments and other properties Downtown.

    Four years ago, Evans' hard work, good luck, success, activism and integrity elevated her to a status of fledgling adviser to the U.S. Federal Reserve Bank, with her initial appointment to the L.A. board. Now she's taken the chairmanship, the first San Diegan to do so.

    Not that San Diego’s influence whether Anne Evans' or the muscle of Harry Todd, San Diego’s first and last director on the L.A. Federal Reserve means much in the scheme of national monetary policy. But San Diego does require a voice, however muted it becomes by the time Alan Greenspan makes his decision to keep interest rates higher than San Diegans would like.

    San Diegans deserve lower interests rates because we righteously or unwittingly carry some weight of supporting a neighboring third-world economy. But it’s a lot harder to make the case today than it was in 1991 through most of 1994. That's when the nation mostly was leaving the recession while San Diego was wallowing ever deeper into what became a depression in this region's financial, real estate and defense industries.

    Since then, finance and defense contracting still aren’t doing so well. But San Diego’s overall economy has rebounded so nicely doubling the nation's growth rate in 1996 and probably again this year it would be embarrassing to suggest any special monetary favors from Washington, D.C., for this uniquely binational region "south of Southern California." (Much of the continent ought to envy San Diego/Tijuana's recovery, except it doesn’t cross most people’s minds. Nor do most Washington statistics collectors and policy shapers think much about San Diego’s unique relationship with Tijuana and Mexico's economy.)

    But if anybody's going to do a decent job of making San Diego’s case, of keeping San Diego’s condition on the minds of Greenspan and the Federal Open Market Committee, well, Annie Evans can do the job. She's charming. She's smart. She's old enough to know better, an original Ronald Reagan Mother Trucker, especially sensitive to San Diego’s immigrant labor pool.

    For the uninitiated, here's a sketch of what the Federal Reserve Bank does: It establishes the discount rate, which essentially sets the prime rate, which virtually sets the interest rates your bank, thrift or credit union charges you to borrow money for your car, house or business.

    It manipulates how much money is floating around in the system.

    And it’s a big check processing house. The Los Angeles branch alone verifies by physically touching, transporting in trucks and planes, stamping and digitally entering an average of 10 million notes daily, mostly in personal and business checks. That's a daily average. It operates 24 hours a day, seven days a week. This Los Angeles Branch of the Federal Reserve Bank of San Francisco handles the cash flow of L.A., San Diego, Phoenix and all of Nevada. Los Angeles is the Fed's second largest operation, after New York. San Francisco handles the rest of the West, including Alaska and Hawaii.

    That San Diego even has a voice on the L.A. board is momentarily fortunate. Through most of the Federal Reserve System's existence since 1913, San Diego has not been represented directly, as many new big cities aren’t.

    Still, with an economy larger than that of Singapore, Chile, the Philippines, Pakistan, Venezuela, Columbia, Ireland, New Zealand, Algeria, Peru, Egypt or Hungary not even including Tijuana shouldn't San Diego have it’s own monetary policy? It sure could have helped San Diego sink less in the early 1990s, putting fewer people out of work (although it was mismanagement and inconsistent regulation not monetary policy that did in San Diego’s big S&Ls.)

    "Why don’t you people just print your own currency?" Alan Greenspan responded when Anne Evans told him how incongruent the relatively high discount rate was with San Diego’s slumping economy a few years ago.

    The conversation took place over the hors d'oeuvres table. "I gave him my litany of woes for Southern California," Evans recalls.

    "His message was, 'It’s not possible to have regional differentiation.'"

    Evans continues, "We came into the recession last and came out of it last. Preceding us, you'll recall, the Northeast had a terrible time, Texas was flat as a tortilla, Arizona went through it and then California. California's recession coincided with the end of the Cold War who could have thought of that? and the changes with the banking and tax laws and the RTC, and it all impinged on California's economy.

    "Regionalization is a good idea, but it won’t work. When the Federal Reserve System was set up in 1913, they visualized regional interest rates, and tried that for a while and it didn’t work too well then. It made it too easy to shift money around. With electronic transfers now, it could not work."

    Imagine the flight of loan fees from San Diego if, in the late 1980s when San Diego was flying high and New England was on the ropes, Boston banks offered loans at 3 percent less than San Diego banks? Local banks would have been crushed.

    If San Diego had enjoyed lower interest rates than the rest of the nation from 1991 to 1994, when San Diego could have used lower rates, San Diego banks might have grown wildly at the expense of banks elsewhere.

    "In Europe (regionalistic monetary policies) have worked for and against the individual economies... people quarrel about interest rates," notes Evans.

    While San Diego may be fortunate to have some influence on the Fed, it is indeed muted. San Diego’s is just one voice on the Los Angeles board, and the L.A. board speaks with one voice to San Francisco Federal Reserve Bank President Robert Perry, the former longtime economist for Security Pacific Bank. Perry has Greenspan's ear. In short, it'll be a record hot day in San Francisco before Washington gives San Diego dispensation.

    "The president of the San Francisco bank is a well-known inflation hawk, so we know how he feels about any actions with regard to the discount rate," says Evans.

    "There's a wonderful thing that Bob Perry wrote in our research materials: In 'Dante's Inferno,' punishment for people who debase the currency was the 10th Pit of the Eighth Circle of Hell. He also pointed out that Lenin (Vladimir, not John) said the best way to destroy the system was to debauch the currency."

    In January was Evans' first monthly meeting as chairman. As usual, L.A. Federal Reserve Branch staff briefed the board and each member was polled regarding any change in the discount rate. That recommendation goes to San Francisco. The San Francisco parent board's advisory vote then goes to the Federal Open Market Committee, composed of the Federal Reserve's six governors, Chairman Greenspan and five of the 12 regional bank presidents, one of whom is always the New York president. The committee's minutes aren’t made public for months after each meeting.

    Evans' colleagues on the L.A. board are Liam McGee, group vice president of Bank of America; Antonia Hernandez, president and general counsel of the Mexican American Legal Defense and Education Fund; Stephen Carpenter, chairman of California United Bank, a small Encino-based bank; David Moore, president of Western Growers; and Lori Gay, president of L.A. Neighborhood Housing Services. There's one vacancy created by the departure of William Randall, formerly a regional vice president with First Interstate Bank in Phoenix.

    So if Anne Evans can’t reduce San Diego’s interest rates, what does she intend to accomplish as chairman? She says she wants San Diego and Southern California to be better understood. She wants the economics of tourism to be understood better. (She says vacation and holiday weekend cash flows from San Diego, Phoenix and Las Vegas obviously expand at the L.A. branch, but the impact of tourism and travel is not well appreciated elsewhere.)

    "Los Angeles and California are so far from Washington and New York, and in some ways we’re far from San Francisco," says Evans. "So I want the Los Angeles and Southern California story to be told better. If you consider the strengths of our economy information systems, entertainment, professional services, tourism all of these are key to the new economy of the United States. There has to be a shift of power to the West, though I don’t know if it will happen in my lifetime."

    Speaking of Washington and San Francisco power over San Diego, speaking of banking were we speaking of old San Diego cronies? what does Anne Evans think of the demise of San Diego’s former pillars, Great American Bank and HomeFed Bank?

    "I believe it was unnecessary for either Great American or Home Federal to fail. I so regret that it happened. It’s been bad for the city and I don’t understand why it had to be. Gordon Luce, Jim Schmidt, Kim Fletcher and Bob Adelizzi are straight shooters.

    "It’s possible that these boys may have gone a little far afield with their interests in markets they did not know as well as San Diego, but you cannot impugn their character.

    "I regret that San Diego no longer has the decision makers for major banking resources. I believe it hurts us not to have access to capital that some other areas have. On the other hand, the surviving bankers say California is very fortunate to have two megabanks (BofA and Wells Fargo) because the whole U.S. is probably going to shake out to have only eight or nine. It’s just seen as the wave of the future. Oh well, I do regret it, and San Diego feels it from the pace of commerce to the scope of donations and civic leadership. Those people (Luce, Schmidt, Fletcher and Adelizzi) really carried the water for all of our health and cultural organizations, and it will be quite a while before that void is filled.

    "We have the new philanthropists emerging, but it’s certainly been a cold winter trying to do without the likes of San Diego Trust, Great American and Home Federal. I will say Union Bank has had a stable presence here.

    "But the two real megabanks don’t want to hear about San Diego feeling jilted. They're quite defensive about it when I bring up the subject, which I do. They don’t understand."