Senate panel approves Yellen as Fed vice chair, 2 others for Federal Reserve Board vacancies

A Senate panel on Wednesday approved three of President Barack Obama's picks for the Federal Reserve, including his nomination of Janet Yellen to be the central bank's second-highest-ranking official.

The Senate Banking Committee also approved Sarah Raskin and Peter Diamond to be on the Fed board, sending all three nominees to the full Senate for confirmation. A vote is expected in September.

The committee approval of the Fed nominees comes as the central bank is trying to steer the fragile economy into a lasting recovery. At the same time, the Fed will play a leading role in implementing a vast revamping of the nation's financial regulation system signed into law last week.

"The members of the board will clearly have their hands full," said Sen. Chris Dodd, D-Conn., the panel chairman.

The three Fed nominations allow Obama to put a bigger stamp on the central bank.

If the Senate confirms each nominee, Obama will have appointed five of the seven members of the Federal Reserve Board in Washington.

Yellen has a long history with the Fed. She has been president of the Federal Reserve Bank of San Francisco since 2004, and she was a member of the Fed's Board of Governors from 1994 to 1997. She'll replace vice chair Donald Kohn, who plans to step down in September.

As vice chairwoman, Yellen's duties would include helping build support for policy positions staked out by Fed Chairman Ben Bernanke, who began a second term in February.

Raskin is the Maryland commissioner of financial regulation. She would expand the Fed's expertise over financial regulation, including consumer issues.

Diamond, an economist at the Massachusetts Institute of Technology, is an authority on Social Security, pensions and taxation.

All three drew some GOP support, but the panel's senior Republican, Sen. Richard Shelby of Alabama, said he was opposing Yellen because she would bring an "inflationary bias" to the central bank.