By Caren Bohan
CHICAGO (Reuters) - U.S. President-elect Barack Obama on Thursday moved to put his stamp on the Federal Reserve with the choice of law professor Daniel Tarullo for an open seat on the central bank's board in what could be the beginning of a wider overhaul.
The 57-year-old Tarullo, a professor at Georgetown University, has been a senior economic adviser to Obama and was former President Bill Clinton's top adviser on international economic policy.
"Dan will bring a lifetime (of) experience to the Fed in economic policy and financial regulation," Obama said at a news conference. "I have no doubt that his knowledge, experience and independence will make him a valuable addition to the Federal Reserve at this critical time."
Obama also said he was nominating longtime financial regulator Mary Schapiro to head the Securities and Exchange Commission and former Treasury official Gary Gensler to head the Commodity Futures Trading Commission.
Tarullo must be confirmed by the Senate. If approved, he will join Fed Chairman Ben Bernanke as the central bank tries to ease a credit crisis and combat a deepening recession that has taken it into unprecedented policy territory with official interest rates pushed virtually to zero.
"If confirmed by the Senate, I look forward to working with Chairman Bernanke ... in helping to steer the economy through these difficult times and in adjusting regulatory and supervisory practices so as to maintain a stable and efficient financial system," Tarullo said.
The Fed's normally seven-person Board of Governors -- the power centre for U.S. monetary policy -- currently has two vacancies. In addition, Fed Governor Randall Kroszner's term expired in January, although he can serve until replaced.
MORE NAMES COMING
This means Obama could quickly name two more nominees for the Washington-based board; another position could open up if Fed Governor Kevin Warsh is named to head the New York Federal Reserve Bank, a position for which he is considered a front-runner.
In addition, Obama will need to decide possibly by next fall whether to renominate Bernanke for a second four-year term as chairman. His current term ends on January 31, 2010.
There has been speculation that former Treasury Secretary Lawrence Summers may be being groomed for the top Fed job. Obama has tapped Summers to head the White House National Economic Council, a position that could give him great sway over the direction of the new administration's policies.
Economists give Bernanke high marks for acting aggressively and with imagination to counter what has become a worldwide credit crunch.
On Tuesday, the Fed entered new policy territory by slashing interest rates to a range of zero to 0.25 percent and vowed to keep pumping money into clogged credit markets to try to counter what threatens to become a global recession.
EYE ON REGULATION
Tarullo has just published a book on global banking regulation that discusses the need for tightening capital standards in the wake of the implosion of markets for securitized mortgages in 2007. Analysts expect some of his ideas to be put into practice as a preventative measure for future crises.
"It seems that the Obama administration is very serious in not only tackling the current economic woes but also setting up a framework that it does not happen again," strategists at 4CAST Ltd. of New York said in a research note.
"This nominee seems to underscore this sentiment, although we will have to wait and see how much Tarullo may want to possible increase the role of the Fed as a regulator for better or for worse," the note said.
Tarullo held several senior positions in the former Clinton administration, serving first at the State Department before moving over to the White House. He was Clinton's personal representative to the Group of Seven industrial nations from 1995 onward, in charge of coordinating U.S. positions for the annual summits of leaders from the U.S., Britain, Canada, France, Germany, Italy and Japan.
(Additional reporting by Glenn Somerville and Nancy Waitz; writing by Tim Ahmann and Glenn Somerville)
