UPDATE 2-Obama moves to fill Fed board, taps Fischer to be No. 2
* Brainard nominated for Fed board seat, Powell renominated
* Moves would help re-shape Fed as Bernanke departs
* Another vacancy looms
WASHINGTON, Jan 10 (Reuters) - President Barack Obama on Friday nominated former Bank of Israel governor and experienced crisis manager Stanley Fischer to be vice chairman of the Federal Reserve, and tapped two others to round out the U.S. central bank's top ranks just as it begins winding down its historic economic stimulus.
Fischer would succeed Janet Yellen, who was confirmed by the Senate on Monday to lead the Fed after Chairman Ben Bernanke's term expires at the end of this month.
Obama also nominated Lael Brainard, who recently served as the Treasury Department's top official for international affairs, to serve on the Fed board, and renominated Fed Governor Jerome Powell, whose current term ends on Jan. 31.
All three need to be confirmed by the Senate.
One of the world's most prominent economists, Fischer has taught many of the leading lights of the profession, including Bernanke and European Central Bank chief Mario Draghi.
"Stanley Fischer brings decades of leadership and expertise from various roles," Obama said in a statement. "He is widely acknowledged as one of the world's leading and most experienced economic policy minds."
As second-in-command at the International Monetary Fund from 1994-2001, Fischer played a key role in battling the Asian financial crisis. Before that he was chief economist at the World Bank.
More recently, Fischer, who has both U.S. and Israeli citizenship, was credited with helping Israel safely navigate the shoals of the 2007-2009 financial crisis. He stepped down as governor of the Bank of Israel in June, three years into his second five-year term.
Fischer's lengthy experience battling economic crises and his international expertise could be important assets if he is confirmed by the U.S. Senate to be a deputy to Yellen.
Brainard also brings a wealth of international experience.
As undersecretary of the Treasury for international affairs for 3-1/2 years, Brainard played a key role in pushing China toward a flexible currency and pressing Europe to tackle its debt crisis more aggressively.
Previously she had served as deputy director of President Bill Clinton's National Economic Council, focusing on international trade and financial policy.
Powell is a domestic finance expert. He served as a top Treasury official under President George H.W. Bush, and when he was originally nominated by Obama to the Fed in 2011, the move was seen as a way to mollify Senate Republicans.
The picks would fill out the normally seven-member Fed board, which is the nucleus of U.S. monetary policymaking.
However, Obama is likely to have another vacancy to fill soon. Fed Governor Sarah Bloom Raskin is awaiting Senate confirmation to be the No. 2 official at the U.S. Treasury.
In addition to a four-year term as vice chairman, Fischer was nominated to fill out Bernanke's board term, which does not expire until Jan. 31, 2020. The nomination was the first official acknowledgment Bernanke would be departing the Fed when his term as chairman expires at the end of the month.
Board terms run for 14 years but are rarely served in full.
If confirmed by the Senate, Fischer and Brainard will have a hand in helping to steer the central bank as it scales backs it aggressive bond-buying campaign. Powell already is in position to do so, since Fed governors can serve until replaced.
Last month, the Fed decided to trim its monthly bond purchase pace to $75 billion from $85 billion, with an eye toward shuttering the program by late in the year.
Yellen has been a strong advocate of the central bank's aggressive actions to stimulate the economy through low interest rates and large-scale asset purchases.
Even so, economists expect Yellen to continue to wind down the bond-buying program, although a report on Friday that showed unexpectedly weak U.S. job growth in December put a question mark over how quickly the Fed might move.
In tapping Fischer, who taught at the Massachusetts Institute of Technology for many years, Obama has chosen someone whose economic credentials are beyond reproach.
But Fischer's recent job as chief of a foreign central bank government, and his stint in the mid-2000s as vice chairman of Citigroup, which later required a government bailout, could constitute red flags for senators, who need to confirm him before he can take office.
Fischer was born in present-day Zambia, where his parents, Jewish immigrants from Eastern Europe, ran a general store. When he was 13, his family moved to what is now Zimbabwe. He took an economics course in high school, and was hooked for life.
He went on to study at the London School of Economics and then MIT, where he later became a professor. There, in 1977, he wrote an influential paper arguing that monetary policy can effectively boost employment.