By Jonathan Spicer and Emily Stephenson
NEW YORK/WASHINGTON (Reuters) - The Senate Banking Committee will vote next week on three nominees to the Federal Reserve's board, including Stanley Fischer for vice chairman, in a big step toward bulking up the U.S. central bank's depleted ranks.
In addition to Fischer, the panel will vote on Tuesday on the nominations of former senior U.S. Treasury official Lael Brainard and current Fed Governor Jerome Powell, who has been nominated for another term.
Powell is one of only four governors currently on the normally seven-member Fed board. Another, Jeremy Stein, retires in a month, heightening the urgency to confirm the nominees.
If the panel approves them, as observers expect, the nominations would be cleared to go before the full Senate for a final confirming vote.
While the Fed is often down a governor or two, it has never had only three board members at any one time. Observers said the shortage of top officials could hamper the Fed's work on monetary policy and bank supervision if lawmakers did not act quickly to rebuild the central bank's board.
"It is depleted," said Donald Kohn, who stepped down as vice chairman of the central bank in 2010, the last time the Fed was briefly down to four governors.
"We operated with five a lot when I was there and that was a burden because there are things that go on behind the scenes, like administration, that require some time," said Kohn, who is now a senior fellow at the Brookings Institution, a think tank.
Fischer, who is among the world's foremost monetary economists, most recently ran Israel's central bank. Previously, he had worked as second-in-command at the International Monetary Fund, as chief economist at the World Bank and as a vice chairman at Citigroup.
Brainard served until recently as a top financial diplomat at the U.S. Treasury and had previously worked at the White House under President Bill Clinton.
Powell served at the Treasury under President George H.W. Bush and worked at private equity firm Carlyle Group. While his term at the central bank ended in January, Fed governors can serve until replaced or confirmed to a new term.
Since former Fed Chairman Ben Bernanke retired at the end of January, the central bank's board - normally the epicenter for U.S. monetary policy - has been in the potentially awkward spot of being outnumbered by regional Fed bank presidents, who always have five votes.
Unlike Fed governors, who are nominated by the president and confirmed by the Senate, regional presidents are privately elected. The system is deliberately designed to give more power on monetary policy to the Washington-based board.
Observers said the board also could become stretched in overseeing bank supervision. For example, Stein, the governor who retires next month, is one of three members of a bank regulatory panel. His exit would leave it short-staffed.
"If they get down to three (governors) that is really going to be difficult," Elizabeth Duke, a former Fed governor who left in August, said in an interview. "There is a lot to be done and not very many people to do it."
If Fischer, Brainard and Powell are confirmed, two spots would remain after Stein leaves. The White House has floated at least three names for those spots, including Diana Preston, a lawyer who recently left the American Bankers Association.
(Reporting by Emily Stephenson and Jonathan Spicer; Editing by Steve Orlofsky, Bernard Orr)