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Bush gives Olson Fed nod
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July 10, 2001: 6:51 p.m. ET
President nominates former bankers group president to Federal Reserve
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NEW YORK (CNNfn) - President Bush said Tuesday he will nominate Mark Olson, former president of the American Bankers Association, to fill a vacancy on the Federal Reserve board.
Olson, a native of Fergus Falls, Minn., was president of the American Bankers Association, a lobbying group for the banking industry, from 1986 to 1987. He is a partner in Ernst & Young LLP and has been president of Security State Bank in Fergus Falls since 1976.
"There should be someone on the board of governors with real on-the-ground banking experience and he certainly has that," said Jim McLaughlin, director of regulatory affairs for the American Bankers Association.
The nomination must be confirmed by the Senate.
Olson's nomination to the central bank's seven-member board is the second so far this year. In June, Bush nominated Tennessee banker and economist Susan Schmidt Bies to fill one of the two vacancies on the Federal Reserve Board after Edward W. Kelley Jr. said in June he intended to resign his Board seat.
According to the ABA, Olson assisted the election campaign of Bill Frenzel to the U.S. House of Representatives in 1970 and joined Frenzel's staff in Washington in 1971. Frenzel, a Minnesota Republican, served from 1971 to 1991 in the House and is a guest scholar with the Brookings Institute. More recently, Olson was a top aide on banking matters to former Republican Senator Rod Grams, also of Minnesota.
A Security State Bank spokeswoman said the bank had "gotten a call" about Olson's possible nomination Tuesday morning, but had no other information.
The Federal Reserve is the central bank of the U.S. and is charged with encouraging U.S. economic growth while avoiding inflation. The Fed steers U.S. monetary policy by manipulating short-term interest rates by raising or lowering its target for the federal funds rate, an overnight bank lending rate. It has cut rates six times this year in an effort to avoid a recession.
For more on the Fed, click here
The Fed's Board of Governors, which manages the Fed system, consists of seven members, but has been operating with two vacancies since July 1999.
Members of the Fed Board are nominated by the President and confirmed by the Senate. They serve a full term of 14 years. The board needs four members for a quorum. With five, at least one member can be traveling or unable to make a meeting without affecting the board's work.
Fed Governor Laurence Meyer's term ends in January 2002 and it is widely believed he will not seek reappointment.
In addition, Fed Chairman Alan Greenspan was reappointed last year to a fourth four-year term that ends in June 2004, when he will be 78, giving Bush the opportunity to replace him as chairman. Greenspan's separate term as a board member expires in 2006. 
-- from staff and wire reports
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