WASHINGTON (AP) Mark Olson, a former president of the American Bankers Association, will be nominated by President Bush for a vacancy on the Federal Reserve Board, the White House announced Tuesday.
Olson, who once headed a small bank in Minnesota, was selected for a term that will run until Jan. 31, 2010.
Olson is the second Bush selection to the board with direct experience in banking. Last month, the president nominated Susan Bies, a top official at First Tennessee National Corp., for another vacancy on the board.
Both nominations must be confirmed by the Senate. Bies would be the only woman on the Fed board.
Bush will have the chance to nominate five members of the Feds seven-member board during his first year in office.
In addition to Bies and Olson, the president earlier this year renominated Vice Chairman Roger Ferguson, who was first appointed to the Fed board by President Clinton.
Private analysts, however, said that Bushs appointments were not likely to change the direction of monetary policy as long as Federal Reserve Chairman Alan Greenspan remains in the top job.
Greenspans strong influence on interest rate decisions reflects the success he has had steering the economy to its longest expansion in history during his 14 years as Fed chairman.
Olson, a graduate of St. Olaf College in Northfield, Minn., headed the Security State Bank in Fergus Falls, Minn., from 1976 to 1988 and was president of the American Bankers Association from 1986 to 1987.
More recently, he was a partner at the accounting firm Ernst and Young. Last year he served as a top banking aide to former Sen. Rod Grams, R-Minn., a member of the Senate Banking Committee who was defeated for re-election.
We believe its important to have someone on the Federal Reserve Board with community banking experience, and President Bush could not have made a better choice, said Donald Ogilvie, an ABA executive vice president.
Sung Won Sohn, chief economist at Wells Fargo Bank in Minneapolis, said Olson would bring the practical experience of running a bank to the Fed, which has regulatory control over the nations large bank holding companies.
Community banks have been complaining for years about over-regulation. Mark will represent their interests well, Sohn said.
In June, Bush announced his nomination of Bies, who since 1980 has worked for First Tennessee, a large regional bank holding company headquartered in Memphis with 200 branches in Tennessee, Mississippi and Arkansas.
The banking industry has complained for a number of years about the lack of anyone with practical banking experience on the Fed board, which has been dominated by Ph.D. economists.
In addition to the Ferguson, Bies and Olson nominations, Bush will be able to fill two other spots on the Fed board in coming months.
Fed board member Edward W. Kelley Jr. has announced his plans to step down when one of the two current vacancies is filled, and Fed board member Laurence Meyer has said he will not seek reappointment when his term expires next January.
Federal Reserve: http://www.federalreserve.gov/
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