NEW YORK (CNNMoney.com) -- Donald Kohn, the vice chairman of the Federal Reserve, announced plans Monday to resign from the U.S. central bank when his term ends in June.
Kohn, 67, played an important role in overseeing the Fed's response to the financial crisis in 2008. His departure will leave a total of three vacancies on the Fed's Board of Governors.
In a letter to President Obama, Kohn said it was his "great privilege" to have been part of the U.S. central bank for more than 40 years. He called his Federal Reserve colleagues "individuals of extraordinary ability" and praised their dedication to "financial and economic stability."
"At no time since the Great Depression have this ability and dedication been tested as they have been over the past several years," he said. "I am confident that history will judge the Federal Reserve, under the leadership of Chairman Ben Bernanke, to have met these challenges with great speed, imagination, and effectiveness."
Kohn, began his career as a Financial Economist at the Federal Reserve Bank of Kansas City in 1970, one year before he received a Ph.D. in economics from the University of Michigan.
In August 2002, Kohn became a member of the Board and has served as its Vice Chairman since June 2006. He was a member of the Federal Open Market Committee, which is the Fed's rate setting body, from 1987 to 2002.
"The Federal Reserve and the country owe a tremendous debt of gratitude to Don Kohn for his invaluable contributions over 40 years of public service," Fed chairman Ben Bernanke said in a statement.
"Most recently, he brought his deep knowledge, experience, and wisdom to bear in helping to coordinate the Federal Reserve's response to the economic and financial crisis," he said.
Bernanke praised Kohn for helping lead the Fed's "stress tests" of major financial institutions last year. Kohn also directed the Board's efforts to increase the transparency of the Federal Reserve, and he has been leading an international push to help central banks focus on key issues and responses to the crisis, Bernanke added.
"I would like to express my deep appreciation for Don's friendship and counsel during some very difficult times," Bernanke said. "He will be greatly missed."
With three openings on the presidentially appointed Board of Governors, Obama has a unique opportunity to put his stamp on the Fed, which remains a largely independent agency.
"There's the possibility that the president could remake the Fed in his own image," said Doug Roberts, author of Follow the Fed to Investment Success. "Right now he has three people on a seven-member board that he gets to pick."
Given the recent push to overhaul the Fed's role in financial markets, Obama could appoint "someone much more friendly to regulation," said Roberts, who is also chief investment strategist for Channel Capital Research.
While it remains to be seen who will replace Kohn, some analysts say Obama could resurrect a Fed official from the era of President Bill Clinton.
Royal Bank of Scotland is making money again after nine years and $81 billion in losses, but investors are worried about a looming US fine for selling toxic mortgages. More
The Commerce Department launched an investigation into whether imported rubber bands are unfairly competing against the U.S. industry. More
When it's time to get washed, cutting edge vehicles require a human touch. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
Here are 5 questions to ask yourself before deciding to pay off student debt early. More