Factbox: Yellen, Raskin and Diamond eyed for Fed board

WASHINGTON (Reuters) - San Francisco Federal Reserve Bank President Janet Yellen is a leading contender to be nominated by President Barack Obama as vice chair of the U.S. central bank, a senior administration official said on Friday.

Sarah Raskin, the top banking regulator for the state of Maryland, and Peter Diamond, a Massachusetts Institute of Technology economist, are also under consideration for Fed board vacancies, the official said.

The following is a brief outline of their backgrounds:

JANET YELLEN

Currently president of the Federal Reserve Bank of San Francisco, Yellen is a top-flight economist with a long history of public service, working for President Bill Clinton as chairwoman of the White House Council of Economic Advisers between 1997 and 1999, and as a governor of the Federal Reserve Board in Washington between 1994 and 1997.

Yellen, who is widely respected within the Fed system, academia and by financial markets, is seen as being on the dovish wing of Fed policy-makers in terms of how she views the risks of inflation compared with unemployment.

The Fed's mandate is to hold prices low and stable, while ensuring the highest level of sustainable U.S. employment. There is ample scope to come to different judgments about the best interest rate stance to reach this objective.

Hawks tend to view higher interest rates, slower growth and lower levels of employment as a price worth paying for keeping inflation at bay. Doves take a more lenient view of inflation if it means stronger employment growth, or are less liable to generate alarming forecasts for inflation as they estimate future growth and price-pressures.

SARAH RASKIN

Raskin is currently commissioner of financial regulation for the state of Maryland. She would bring important skills and experience to the U.S. central bank as the Obama administration seeks to strengthen consumer protection against the sort of financial products blamed for the U.S. subprime mortgage crisis, which tipped the economy into a severe recession when the housing market collapsed.

She is known as an expert on consumer and regulatory issues. She had held positions as chair of the Regulatory Restructuring Task Force, a group of state banking commissioners who are developing principles for evaluating regulatory restructuring proposals, and chair of the Consumer Financial Products Agency Task Force.

She was also previously managing director at Promontory Financial Group and banking counsel at the U.S. Senate Banking Committee, and worked at the New York Federal Reserve Bank and the congressional Joint Economic Committee.

In testimony before the panel overseeing the government's bank bailout last year, Raskin called for stronger consumer focus from regulators and backed breaking up banks that have become too large.

"The current crisis is the result of well over a decade's worth of policies that promoted consolidation, uniformity, preemption and the needs of the global marketplace over those of the individual consumer," she said in January 2009.

PETER DIAMOND

An economics professor at the Massachusetts of Technology, Diamond has written extensively on taxation and pension reform. He would add a consumer-focused voice to the Fed at a time lawmakers are debating whether to strip the central bank of its consumer protection role. His 2004 book, "Saving Social Security," was co-authored with Peter Orszag, now director of Obama's Office of Management and Budget.

Diamond, a former president of the American Economic Association, is known as a proponent of behavioral economics, which studies why people do not always make rational decisions.

He has frequently consulted on panels examining the future of Social Security, the government-backed pension system.

(Reporting by Alister Bull and Mark Felsenthal; Editing by Leslie Adler)