Senate Panel Approves 2 Bankers for Fed Posts

The Senate Banking Committee on Tuesday approved the nominations of bankers Susan Schmidt Bies and Mark Olson to the seven-member Federal Reserve Board, whose most visible job is setting U.S. interest rates.

Bies and Olson cleared the committee on a 21-O vote. The panel also cleared California banker James Gilleran to be director of the Office of Thrift Supervision.

They now must be approved by the full Senate in a vote that could come as early as today, according to an aide to Senate Majority Leader Tom Daschle (D-S.D.).

The panel’s approval of Bies and Olson brings the Fed one step closer to having all its seats filled for the first time in two years.

The board has operated with only five members since 1999, partly due to political maneuvering on Capitol Hill before President Bush took office in January.

Bies spent 21 years with First Tennessee National Corp., a Memphis, Tenn., bank. She has a doctorate in economics and has worked at the Federal Reserve Bank of St. Louis.

Olson is a former Minnesota banker who headed the American Bankers Assn. in 1986 and 1987. He also has worked as a staff member on the Senate Banking Committee.

Bush, who nominated Bies and Olson, has the unprecedented opportunity of selecting a majority of the Fed’s membership during his four-year term.

In addition to the two vacant slots that Olson and Bies would fill, Fed Gov. Edward Kelley announced earlier this year that he would leave the board once either vacancy was filled.

And Bush also will need to fill Fed Gov. Laurence Meyer’s seat when his term expires in January. Meyer has said he does not plan to seek another term.

In addition, Alan Greenspan was reappointed last year to a fourth four-year term as chairman. That term ends in June 2004, when Greenspan will be 78, giving Bush the opportunity to replace him as chairman. Greenspan’s separate term as a board member expires in 2006.

Gilleran, who was chairman and chief executive of the Bank of San Francisco from 1994 until it was sold in December, will take over from the thrift agency’s current director, Ellen Seidman. The OTS is the nation’s regulator of savings and loans.