Boston Banker Nominated for Fed Seat

President Reagan on Monday nominated John LaWare, a Democrat who is the chairman of one of Boston’s leading banks, to be a member of the Federal Reserve Board.

If confirmed by the Senate, LaWare, 60, would fill the seat on the central bank board that became vacant in December, 1986, when Henry Wallich resigned because of poor health.

LaWare had been chief executive of Shawmut Corp. for seven years until its merger last year with its New England neighbor Hartford National Corp.

LaWare, a Harvard graduate, stepped down to the No. 2 position at the merged institution, called Shawmut National Corp., because Hartford was the larger and more profitable bank. Hartford’s chairman, Joel Alvord, took over as chief executive of the combined company.

His nomination ends a long search to fill the seventh seat on the Federal Reserve Board.

The Administration was searching for a banker to balance the composition of the board, which is heavily weighted toward economists.

The White House had floated a series of names, but they foundered on various objections either from within the Administration or in Congress, which requires Fed governors to come from different central bank districts.

LaWare would join a Fed board of six Reagan-appointed Republicans, headed by Chairman Alan Greenspan, who are struggling to navigate unusually tricky economic shoals this election year.

Fears of a recession induced by the stock market crash have faded, but have been supplanted by worries about a resurgence of inflation.

The Fed is also deeply involved in the overhaul of the nation’s banking system and in the debate on how best to shield the stock market from a repeat of last October’s Black Monday crash.

LaWare was not at his Boston office late on Monday and could not be reached for comment, but officials and bankers said they doubted his nomination would shift the thrust of Fed policy.

In addition to Greenspan, the central bank’s current board members are Vice Chairman Manuel Johnson, Martha Seger, Wayne Angell, Robert Heller and Edward Kelley.