Summers drops out of running for Fed chairman amid criticism

By Agencies in Washington | China Daily | Updated: 2013-09-17 08:20

For weeks, Lawrence Summers was considered the leading candidate to succeed Ben Bernanke as US Federal Reserve chairman.

A renowned economist, Summers built close ties to US President Barack Obama when he led the president's National Economic Council in 2009 and 2010. In that role, he helped orchestrate the administration's efforts to combat the financial crisis and the recession.

But on Sunday, Summers withdrew from consideration for the Fed.

His withdrawal followed growing resistance from critics, including some members of the Senate committee that would need to back his nomination. By law, the president names the Fed chief, but the nomination has to be confirmed by the Senate.

His exit could open the door for his chief rival, Janet Yellen, the Fed's vice-chair. If she were chosen by Obama and confirmed by the Senate, Yellen would become the first woman to lead the Fed.

In the past, Obama has mentioned only one other candidate as possibly being under consideration: Donald Kohn, a former Fed vice-chair. But Kohn, 70, has been considered a long shot.

The administration also reached out to former treasury secretary Timothy Geithner early in the process. Geithner, however, said he was not interested in being considered.

Obama is expected to announce a nominee for the Fed chairmanship as early as this month. Bernanke's term ends on Jan 31.

"Earlier today, I spoke with Larry Summers and accepted his decision to withdraw his name from consideration for chairman of the Federal Reserve," Obama said in a statement released on Sunday afternoon.

"Larry was a critical member of my team as we faced down the worst economic crisis since the Great Depression, and it was in no small part because of his expertise, wisdom, and leadership that we wrestled the economy back to growth and made the kind of progress we are seeing today," Obama said.

John Cornyn, the second-ranking Republican in the Senate, the upper chamber of the US Congress, had announced that he would oppose Summers as Fed chairman.

Three Democrats on the 22-member Senate Banking Committee, which will vet any nomination, have also voiced their resistance, which means that a Summers nomination would have faced a hard time even advancing to the full floor.

"This is a complex moment of our national life. I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the administration, or ultimately, the interests of the nation's ongoing economic recovery," Summers said in a letter to Obama.

AP-Xinhua