President Clinton is getting a cool response from the banking industry to his two new nominees for the Federal Reserve Board.
The candidates he tapped last week - White House Budget Director Alice M. Rivlin and Washington University professor Laurence H. Meyer - are career economists. Industry officials said the Fed, without a banker's input, won't know the real impact its rules have on financial institutions.
"We are disappointed it wasn't a banker," said James McLaughlin, director of agency relations at the American Bankers Association. "The advantage of a banker is to have someone who has the experience and would know the impact of some of the policy decisions the board is making."
A banker can explain why certain policies, such as lending disclosure rules, sound great on paper but won't work in the real world, he said.
"Nonbankers tend not to fully appreciate and understand the subtleties of banking," said Robert Albertson, an analyst at Goldman, Sachs & Co. "It could mean ultimately some misinformation or misjudgments about banks on regulatory issues."
It's not as if the White House didn't try.
Laura Tyson, the President's national economic adviser, said the administration had interviewed bankers, but she hinted that none could be enticed to take the job.
"One of the requirements is that you be at least reasonably interested in talking about being on the board," Ms. Tyson told a press conference Thursday. "We searched for the best possible candidates, and by the end, our group did not include a banker."
The administration had courted Wachovia Corp. chairman John G. Medlin Jr. and former First Fidelity Bancorp. chairman Anthony Terracciano, industry sources said. Neither banker returned calls.
The last banker on the Fed board was John P. LaWare, former chairman of Shawmut Corp., who resigned last April. Mr. LaWare, now vice chairman of Secura Group, said Friday that the administration had made an honest effort to find a banker.
"I can't really fault them," he said. "Time ran out, and it was important that the nominations go up to the Hill."
Fed Chairman Alan Greenspan's term expires March 2, and the administration wanted to package his renomination with the nominees for the two board vacancies.
Ms. Rivlin is slated to be Fed vice chairman, replacing Alan Blinder, who returned to Princeton University last month. She'll get a full 14-year term. Mr. Meyer, who is president of his own economic consulting firm, will serve the remaining six years of Mr. LaWare's term.
While not including one of their own, the President's selections drew praise from some in the industry.
"These are very solid nominations," said Frederick Breimyer, chief economist at State Street Bank and Trust Co. in Boston. "We all know Alice Rivlin. She is entirely competent and highly qualified. There isn't a negative thing to say about her.
"Larry Meyer, I've known for years. He is a highly regarded economic forecaster. He is very intelligent, insightful, diligent, and has a very high amount of energy."
John Dubinsky, president of Mark Twain Bank in Ladue, Mo., credited Mr. Meyer for his bank's success. "He has met with our asset-liability group each and every month for the last 10 years," Mr. Dubinsky said. "His input has been invaluable in helping us to understand the economy."
Bank economists and analysts said they don't expect the nominations to affect the banking business. "I take the overriding assumption that the goal of the Fed is to keep the economy on track," Mr. Albertson said, "so the effect on banks would be neutral."
Lynn Reaser, chief economist at First Interstate Bancorp and chairman of the ABA's Economic Advisory Committee, said that, if anything, banks may be helped if these nominees influence the Fed to cut rates further.