WASHINGTON (Fortune) -- With the impending retirement of Federal Reserve Vice-Chair Don Kohn, it's time for President Obama to get serious finally about filling some long-empty seats at the Fed.
In June three out of seven spots on the board will be open. Incredibly, one of those seats has been empty since August 31, 2008 when Frederic Mishkin stepped down (uncanny timing on his part, considering the financial crisis that soon followed).
So who will Obama pick? There are a few issues to consider going into the search. One is that upon Kohn's retirement, Bernanke will be the only board member with a Ph.D. in economics. Of the remaining board members, Kevin Warsh and Daniel Tarullo have law degrees, and Elizabeth Duke has an M.B.A. While it's a good mix of backgrounds, Obama will probably want another person with heavy-duty expertise in monetary policy.
Another consideration is geographic diversity. The board now is weighted towards people from New York and Washington. "Can we get someone from west of the Appalachia?" asks Michael Brandl, a senior lecturer at the University of Texas at Austin's McCombs School of Business.
Treasury Secretary Tim Geithner and Chief Economic Adviser Larry Summers are leading the search. Here's who they're likely to look at:
Working alongside Geithner and Summers already, Christina Romer has kept a somewhat low profile as chair of Obama's Council of Economic Advisers. But like Bernanke, she built a star academic career studying the Great Depression. Romer did groundbreaking work showing how monetary policy -- specifically the decision to abandon the gold standard -- played a huge role in the U.S.'s recovery from the crisis.
Romer's husband David Romer is also a possibility, though probably a dark horse candidate. A master macroeconomist, he and his wife have co-written papers before. He's a good idea "if [the White House] wants to keep Christina but they want to have her ideas at the Fed," says Garett Jones, associate professor of economics at George Mason University.
Also from the academic camp, macroeconomist Michael Woodford from Columbia University is a leading monetary theorist who co-authored the seminal book, Interest and Prices: Foundations of a Theory of Monetary Policy. "He literally wrote the book on modern macro," says Jones.
Inside the Federal Reserve already, Brian Madigan holds Kohn's former job, director for monetary affairs. This means that Madigan tracks financial market conditions and watches out for what the Treasury and Fed are doing all the time. Plus, Madigan has been working at the Fed since 1983. "He wouldn't be a bad idea," says Brandl. "If you take out Bernanke, they've only got a handful of years of experience."
In another vote for experience, Obama could very well tap Roger Ferguson, a former vice-chair of the board who's now president and CEO of TIAA-CREF. Ferguson is an expert in bank payment systems; for instance he understands how banks make big financial transactions electronically. "If FDIC wants to shut down a big bank," says Jones, "they're going to call someone a lot like him."
Janet Yellen, president of the Federal Reserve Bank of San Francisco, is another name that often makes the shortlist. Any nominee would probably face some political headwinds -- the Federal Reserve has become a favorite punching bag on the Hill -- and Yellen could be a palatable choice for Democrats.
"She's a centrist, but she's on the dovish side of centrist," says Michael Hanson, an economist at Bank of America Merrill Lynch. In other words, Yellen is likely to be more hesitant to yank up interest rates if the economy is still recovering slowly and unemployment remains high.
Given the general acknowledgement of his intelligence, Summers could wind up recommending himself (evoking memories of Dick Cheney's running mate search for George W. Bush). There is, of course, the question of his notoriously thorny personality -- Obama may want the smoothest possible confirmation process so he can fill these slots quickly.
With three openings, there's plenty of room to introduce some new names -- perhaps someone who won't appear on any Fed watcher's list. As Brandl points out, few had heard of Warsh before his appointment. "Don't look for a superstar," he advises. "Look for someone who's got their head screwed on straight."
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