The White House has given up its search for a banker and instead picked consultant Roger W. Ferguson and college professor Edward Gramlich for two vacancies on the Federal Reserve Board.
President Clinton signed off on both candidates last week, an administration official confirmed Monday, but will wait for background checks to be completed before announcing the nominations.
"They are just being vetted before going to Congress," the official said. Both candidates were first identified by The Wall Street Journal.
The administration chose Mr. Ferguson, 46, because he is both an established economist and a banking expert at the New York office of the McKinsey & Co. consulting firm, the official said. "He has firsthand experience on the move toward deregulation," the official said. "This was obviously a consideration."
Industry officials said they were disappointed that the President did not select a banker for the Fed, which has been without a financial industry voice since John P. LaWare, the former chairman of Shawmut National Bank, resigned as governor in 1995.
"This was a golden opportunity to diversify the board to bring in someone who had firsthand experience in Fed supervision and regulation," said Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America.
"You can't help but feel that the industry is not as well represented by not having a real, live banker who knows banking inside and out," said James Chessen, chief economist at the American Bankers Association.
Mr. Gramlich, 57, is the dean of the University of Michigan's public policy school. He led the Advisory Council on Social Security last year, served as acting chairman of the Congressional Budget Office in the late 1980s, and spent three years in the 1970s at the Brookings Institution.
Mr. Ferguson, a Harvard-trained lawyer and economist, has provided advice to money-center and regional banks on mergers, cost-cutting initiatives, the payment system, and new product development. He also is a technology expert, overseeing McKinsey's research and information systems. If confirmed, he would be the Fed's second African-American governor. Andrew Brimmer was the first.