Kelley to Step Down From Fed Board

Federal Reserve Governor Edward W. Kelley Jr. said Wednesday he will step down from the Fed's seven-member board at the end of this month.

Kelley, who has served on the Fed's board of governors for 141/2 years, longer than any other current member, said in a letter to President Bush that his resignation would be effective on Dec. 31.

He had announced in June that he planned to leave as soon as at least one of two Fed board vacancies had been filled.

Bush's two nominees, Susan Schmidt Bies and Mark W. Olson, won Senate confirmation last week and both participated in their first Fed interest-rate meeting on Tuesday.

Federal Reserve Chairman Alan Greenspan, who took over as Fed chairman just three months after Kelley joined the board in 1987, praised his departing colleague.

``During his more than 14 years on the board, I have valued his sound judgment, hard work and, above all, his friendship,'' Greenspan said in a statement. ``I know of no one in public life with greater integrity or higher principles.''

Kelley, 69, was first appointed to the board by former President Ronald Reagan then reappointed by Bush's father for a full 14-year term that would have expired on Jan. 31, 2004. Kelley, a Houston business executive, was a close friend of former Treasury Secretary James A. Baker.

Kelley said he was resigning to devote attention to his family and personal interests.

In addition to Kelley's spot on the board, Bush will soon have another Fed vacancy to fill. Fed board member Laurence Meyer has announced he will not seek reappointment when his current term ends in January.