CNN: The board will be headed by Paul Volcker, who served as the chairman of the Federal Reserve from 1979 through 1987, serving under Presidents Carter and Reagan.
Following his tenure there, Volcker worked in the private sector as an investment banker until 1996. Volcker also headed the investigation into the United Nations' oil-for-food program for Iraq.
"The reality is that sometimes policymaking in Washington can become a little bit too ingrown," Obama said at a news conference in Chicago, Illinois.
"The walls of the echo chamber can sometimes keep out fresh voices and new ways of thinking. ... This board will provide that perspective to me and my administration, with an infusion of ideas from across the country and from all sectors of our economy," he said.
Obama senior adviser Austan Goolsbee will be the chief economist on the board. With the board, Obama says he's trying to prevent group think.
Today's press conference video
Obama trying to boost confidence in the markets: