SAN FRANCISCO - The top public finance executive in the office of California Treasurer Bill Lockyer has departed.

Paul Rosenstiel, deputy treasurer for public finance since Lockyer took office at the beginning of 2007, has returned to investment banking, and his old firm, in the San Francisco office of De La Rosa & Co.

Rosenstiel, 58, worked there from 1995 to 2005 before moving to politics and the public sector, first as policy adviser to former controller Steve Westly's ultimately unsuccessful campaign for governor, then as deputy treasurer.

"There are not sufficient superlatives to describe Paul's contributions to this office and the California taxpayers," Lockyer's spokesman, Tom Dresslar, said yesterday. "He's extremely intelligent, knowledgeable, and a good guy to boot."

Lockyer appointed Katie Carroll, a 23-year veteran of the treasurer's office, to replace Rosenstiel as deputy treasurer for public finance. Carroll has been director of the public finance division since 2003.

"She has great respect in the municipal finance community," Dresslar said. "The treasurer has the highest confidence in her."

Blake Fowler, assistant director in public finance, is now acting director.

Dresslar said Rosenstiel played a critical role in steering the state's bond program through waves of turbulence, including the collapse of the auction-rate securities market, troubles in the variable-rate demand bond market, and the meltdown of the bond insurance industry.

"I think the most important thing we did and that I had a role in was the Buy California Bonds campaign," Rosenstiel said yesterday, referring to a marketing campaign that targets retail buyers. "Maybe we got just a little lucky in anticipating how important retail was going to be but it has turned into something that's critically important."

He also played a key role in Lockyer's efforts to reform the municipal bond rating system, arguing that the system has unfairly penalized muni issuers by exaggerating their likelihood of default.

"I think we'll see, when the economy does improve, whether municipal issuers continue to have a good record of not defaulting and see how that compares with corporate issuers," Rosenstiel said. "In some ways, we've got a good test here."

Rosenstiel returns to De La Rosa as principal and an equity owner. As the senior banker in San Francisco, he is charged with expanding the firm's business in northern California and helping to manage the strategic growth of the firm.

"Paul helped the firm grow into a serious regional player during his 10 years with us, and helped build the foundation for the continued growth we've experienced since he left," the firm's president, Edward J. De La Rosa, said in a statement.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.