Former Chase Exec Parry Is Choice for Fed Board

The White House is set to nominate former bank executive Carol Parry for one of two openings on the Federal Reserve’s Board of Governors before the end of next week, an administration official said Friday.

“We’re very hopeful we’ll make the nomination before Congress leaves for recess” next Friday, the official said.

Parry, who until a month ago was an executive vice president at Chase Manhattan Corp. in charge of community development, would fill the position vacated by former Fed board member Susan Phillips more than a year ago.

As a governor, Parry would play a key role in setting U.S. interest rate policy as well as in bank supervision and other regulatory matters.

Administration officials have indicated repeatedly that they wanted to fill the post with a banker who has expertise in lending to minorities and low-income communities.

Fed board members are nominated by the president and must be confirmed by the Senate.

Parry, 58, previously worked at Chemical Bank, Manufacturers Hanover, as a management consultant at McKinsey & Co. and as head of her own consulting business. She directed New York City’s child welfare services from 1974 to 1977.

With the departure earlier this month of Fed Vice Chair Alice Rivlin, there are two vacancies on the seven-member board, the central bank’s top decision-making body.

Key interest rates are determined by the Federal Open Market Committee, which is made up of the Fed’s Washington-based board members plus the presidents of five of the 12 regional Fed banks, who vote on a rotating basis.

A full term on the board runs for 14 years. One term begins every two years, a mechanism designed to prevent any one administration from exerting undue influence over the board’s membership.