This paper studies the relevance of regional banking sector stability for the voting behavior of Federal Open Market Committee (FOMC) members. In the past three decades, major episodes of bank distress have been associated with significant increases in the dispersion of regional banking sector instability among Federal Reserve districts. Given the relevance of bank failures for the regional economy, FOMC members may take banking sector instability in their district into account when they vote. Moreover, the (re)election process of regional Fed Bank presidents may establish a strong connection between the stability needs of district’s member banks and their respective Bank president’s voting preferences in the FOMC. To the best of our knowledge, we are the first to examine the impact of regional banking sector stability on the voting behavior of FOMC members, and to analyze the member specific characteristics that establish this channel. Matching call report data on U.S. banks and FOMC voting records taken from the FOMC minutes over the years 1979–۲۰۱۰, we find robust evidence that FOMC members align their voting behavior with bank stability in their district. Using fixed-effects ordered probit models, our results show that higher levels of banking sector instability (indicated by a lower z-score)1 in the FOMC member’s Federal Reserve district are associated with a higher probability of voting for lower interest rates and a lower probability of voting for higher interest rates. This result is robust to using alternative bank instability measures, and model specifications. Moreover, we use instrumental variable (IV) ordered probit models to address possible endogeneity issues. Using a banking deregulation indicator capturing the state specific lifting of interstate bank entry restrictions associated with the 1994 Riegle–Neal Act, and lagged z-scores as instrumental variables, we obtain robust confirmatory support for our baseline results. In terms of economic importance, we note that despite its statistically robust effect, the standardized impact of regional banking sector stability on voting behavior of FOMC members is rather small. A one standard deviation reduction in the regional banking sector z-score is associated with a 1.7 percentage points increase in the probability of a vote for lower interest rates by the district’s representative in the FOMC. The standardized effect on raising interest rates is around 2 percentage points. To assess the economic significance of the results, we note that 16.8% of all votes in our sample favored monetary easing, and 21% were in favor of tightening. The standardized impact of regional banking sector instability is around 40%, respectively 25%, as large as the impact of national inflation and the national output gap. Thus, regional banking sector stability seems to shape the monetary policy preferences of FOMC members significantly, but with a limited impact compared to the traditional stabilization goals. We further note that we estimate member specific voting models. Thereby, our results are only indicative of the monetary policy preferences on the individual monetary policymaker level, but we cannot draw conclusions about actual interest rate decisions of the committee as a whole. However, since the FOMC’s interest rate decisions result from the majority vote of FOMC members, regional bank stability does not only influence the probability of individual interest rate votes, but indirectly has also implications for the committee’s interest rate decision (although such a test is not the focus of the paper).