The line to be the next Federal Reserve Chair got one person shorter Sunday when former treasury secretary Larry Summers withdrew his name. The term for current FED chair Ben Bernanke expires January 31, 2014, and the Obama administration’s first pick is no longer in the running.
Summers cited the inevitable contempt that would follow his nomination as cause for his withdrawal:
“This is a complex moment in our national life. I have reluctantly concluded than any possible confirmation process for me would be acrimonious and would not serve the interests of the Federal Reserve, the Administration, or ultimately, the interests of the nation’s ongoing economic recovery.”
“I applaud Larry Summers for withdrawing his name from consideration,” Bernie Sanders, Independent Senator from Vermont, said. “The truth is that it was unlikely he would have been confirmed by the Senate. What the American people want now is a Fed chairman prepared to stand up to the greed, recklessness and illegal behavior on Wall Street, not a Wall Street insider whose deregulation efforts helped pave the way for a horrendous financial crisis and the worst economic downturn in the country since the Great Depression…”
The field of potential nominees to chair the Fed has narrowed slightly, but the Democratic favorite remains Janet Yellen, vice chair of the Board of Governors of the Federal Reserve.
Yellen comes from a long history in banking. As the head of the San Francisco Federal Reserve Bank from 2004 to 2010, she was appointed by Obama to the vice chairmanship when she left the San Francisco Fed. Although she’s a likely second choice, some reservations remain as to what kind of chair she’d be.
Next in line appears to be Donald Kohn, former vice chair of the Federal Reserve from 2006 to 2010. Kohn has spent almost 40 years in central banking and has been mentioned as a possible nominee during meetings between the president and members of Congress, according to the Washington Post.
Timothy Geithner, the former Treasury secretary, who served during the heat of the Great Recession, has also been mentioned. He faces similar hurdles as Summers when it comes to Democratic support and helped oversee the bailout of AIG, Bank of America, and others.
Less likely choices include: Stanley Fischer, Roger Ferguson, and Lael Brainard.
Fischer was the governor of the Bank of Israel from 2005 to 2013.
Roger Ferguson, another vice chair of the Board of Governors, like Kohn, served under President Bush from 1999 to 2006. Before entering the Fed in 1997, Ferguson was an attorney practicing banking law.
Lael Brainard is the current Undersecretary of the Treasury for International Affairs and she has been mentioned as a potential vice chair, but Summers’ withdrawal could put her in the number 1 spot. From 2001 until filling the undersecretary role, Brainard was a senior fellow at the Brookings Institution.