President Obama will renominate Peter Diamond to the Federal Reserve Board after the Nobel laureate economist failed to gain U.S. Senate approval, a White House official said.
Diamond, 70, said in a Nov. 30 interview that he would accept renomination. The Senate adjourned Wednesday without voting on Diamond's nomination, which Obama first offered in April.
Republicans questioned Diamond's monetary-policy expertise and compliance with a geographic provision of central bank law.
"It helps if the chairman has a point person who can advance the arguments and participants feel it's OK to criticize that person," said Vincent Reinhart, a former Fed monetary-affairs director who is now a resident scholar at the American Enterprise Institute in Washington. "So you get a lot of the issues aired without the chairman having to expose himself."
The failure to approve Diamond leaves one opening out of seven on the Fed's Washington-based board. All governors, along with five of the 12 regional Fed presidents, have a vote on monetary policy at each Federal Open Market Committee meeting. The FOMC voted 10-1 on Dec. 14 to maintain its unconventional-stimulus plan to buy $600 billion of Treasuries through June.
Diamond's nomination was held up by Senate Republicans and returned in August to the White House, which nominated him again in September. Sen. Richard Shelby of Alabama, the senior Republican on the banking panel, questioned Diamond's monetary policy qualifications and said his nomination violates a law that no two Fed governors can be from the same region.