* Full confirmation expected to occur by Memorial Day recess
* Two board seats remain vacant
* FOMC in Day 1 of a two day meeting; next meeting is June
(Adds Breakingviews link)
By Michael Flaherty and Richard Cowan
WASHINGTON, April 29 The Senate Banking
Committee approved three nominees to the Federal Reserve's board
on Tuesday, including Stanley Fischer to be the U.S. central
bank's No. 2, in a big step toward replenishing the Fed's
The panel also backed the nominations of former senior U.S.
Treasury official Lael Brainard and current Fed Governor Jerome
Powell, who was nominated for another term. All three nominees
were approved on a unanimous voice vote.
The nominations are now cleared to go before the full Senate
for final confirmation votes. A date for Senate consideration
has not yet been officially set.
Former Fed officials say the Senate needs to act fast to
confirm the nominees, given the heavy workload the board faces
with only a few governors in place.
People familiar with the matter said that a full
confirmation of the three is expected by the Memorial Day recess
in late May, though it was still unclear whether Democrats and
Republicans will agree on the timing.
With Fed Governor Jeremy Stein leaving in late May to return
to academia, the normally seven-person board would fall to three
members for the first time in its more than 100-year history if
the Senate does not move quickly.
"If the Fed goes down to three in June, it's reprehensible,"
said Northern Trust economist Carl Tannenbaum, who has worked
for both the Fed board in Washington and at the Federal Reserve
Bank of Chicago.
Fed policy makers began a two-day meeting on Tuesday. At its
previous meeting, the board voted to reduce the monthly pace of
bond purchases by $10 billion, to $55 billion, and said more
reductions in "measured steps" were likely. The next FOMC
meeting is set for June 17-18, which includes Yellen's second
The Fed also has 12 regional branches, whose presidents
rotate through five voting positions each year.
Fischer's previous roles include the No. 2 spot at the
International Monetary Fund, chief economist at the World Bank
and vice chairman at Citigroup.
The 70-year-old, who was born in Zambia, is highly regarded
in monetary policy circles for his extensive international
experience, his academic career teaching economics at the
Massachusetts Institute of Technology, and his successful stint
at the top of Israel's central bank.
The combination of veteran Fed policymaker Janet Yellen
leading the central bank and Fischer as second in command comes
with high expectations, though Fed watchers will have to wait
and see just how well the two work together in their roles.
Brainard, 52, served until recently as a top financial
diplomat at the U.S. Treasury and had previously worked at the
White House under President Bill Clinton. Predicting her
influence on the Fed is more difficult than it is for Fischer,
given her lack of experience with monetary policy.
Among the biggest strengths she brings to the Fed is her
international policy background, including experience working
with European officials during the height of the euro zone
Brainard also worked as a consultant at McKinsey and taught
Powell, 61, served at the Treasury under President George
H.W. Bush and worked at private equity firm Carlyle Group. While
his term at the central bank ended in January, Fed governors can
serve until replaced or confirmed to a new term.
Even if Fischer, Brainard and Powell are confirmed, as
analysts widely expect, two empty spots would remain on the
board after Stein leaves. President Barack Obama is said to be
considering someone with community banking expertise for one of
(Reporting by Michael Flaherty; Editing by Paul Simao and Chizu