Bush taps ex-Minnesota community banker for Fed board
Dee DePass
Star Tribune
Wednesday, July 11, 2001
Former Minnesota banker Mark Olson will be nominated by President Bush to serve on the Federal Reserve Board of Governors, which sets interest rates and other
monetary policies.
Olson, who headed Security State Bank in Fergus Falls before selling the bank in the late '80s, said he received a White House call Tuesday morning with the news.
"I am very pleased," he said, speaking from his Maryland residence.
If Olson is approved by the Senate, he will fill one of two vacancies on the seven-member board. Last month, Bush announced that he would
nominate Tennessee banker Susan Bies to fill the other vacancy.
The board is headed by Alan Greenspan.
Olson declined to comment further, but observers noted that his rural roots and political contacts in Washington, where he has served as a policy
analyst for a decade, put him in line for the job, which carries a 14-year term. Bush was said to be leaning toward a nominee with rural banking
experience, a rarity on the Fed.
Others noted Olson's close relationship with former Republican U.S. Sen. Rod Grams and current U.S. Sen. Chuck Hagel, R-Neb., who fostered the
nomination. Also working in Olson's favor is that the Fed's Ninth District, of which Minnesota is a part, had not been represented on the Fed for
nearly 20 years.
"Mark will have a perspective that has not been in Washington since the mid-80s," said Al Olson, president of the Independent Community Banks of
Minnesota, who is no relation to Mark Olson. "It's a good appointment for this part of the country and especially for community banking."
"The last time we had a rural, main street perspective was with Fed governor Wayne Angell from Nebraska [who resigned in 1994]. Mark has that understanding. It's a
dimension of our economy that is losing connection with the rest of the country," Olson said.
Olson joined the Senate Banking Committee last year as staff director of the securities subcommittee, which Grams chaired. The panel oversaw the implementation of
the 1999 Gramm-Leach-Bliley Act, which overturned Depression-era laws that barred banks, securities and insurance firms from merging.
While Olson has spent the past 13 years in Washington, the St. Olaf College graduate was described by bankers here as a pure Minnesotan.
He began his banking career with First Bank System in 1966 and became an aide to Rep. Bill Frenzel, R-Minn., in 1970. From 1976 to 1988 Olson was president and
lead owner of Security State Bank of Fergus Falls. In 1986 he was elected president of the American Bankers Association in Washington, D.C., and served for one year
before becoming a bank consultant with Ernst & Young in 1988.
He sold his interest in Security State Bank to the Paul Lindholm family soon after. He retired from Ernst & Young in 1999.
Minnesota Bankers Association President Mary Ellen Domeier said bankers in the state are "real excited about the fact that we have a Minnesotan in such a prestigious
position with such a sound banking background ... Olson will be mindful of the effects that regulations have on community banks."
American Bankers Association Executive Vice President Don Ogilvie also applauded Olson's nomination.
"President Bush could not have made a better choice than Mark Olson ... Mark is known throughout the banking industry for his thoughtful, practical approach to
banking and financial issues," he said.
Junior members are not generally considered to wield great influence at the Fed. Instead, Greenspan is thought to steer most decisions, with long-serving members of
the board holding some clout. It's not known what role, if any, Greenspan played in advising Bush on his nominees.
However, Fed meetings aren't public and clues to its workings come only from minutes of meetings that are released well after the events.
"Against the backdrop of a powerful Fed chair, the thinking is that ... Greenspan makes the decisions and that the other governors are simply there. But all that is
behind closed doors," Al Olson said.
Domeier said, "I think all the governors listen well to each other. And while Governor Greenspan is the spokesperson, certainly it takes a full board to come to
consensus."
The Fed has cut interest rates six times since Jan. 1 in an attempt to stimulate the flagging economy. The board next meets in August and another rate cut is considered
a possibility.
-- Dee DePass is at ddepass@startribune.com .
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