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| Version 3 | Version 4 |
|---|---|
| Larry Summers pulls out of US Federal Reserve race | Larry Summers pulls out of US Federal Reserve race |
| (about 5 hours later) | |
| Former US Treasury Secretary Larry Summers has withdrawn his candidacy to succeed Ben Bernanke as head of the US central bank, the Federal Reserve. | Former US Treasury Secretary Larry Summers has withdrawn his candidacy to succeed Ben Bernanke as head of the US central bank, the Federal Reserve. |
| In a letter to President Barack Obama, Mr Summers said any confirmation process for him was likely to be "acrimonious". | |
| Mr Summers was one of the front-runners, along with current Federal Reserve vice-chairman Janet Yellen. | |
| The dollar fell in Asian currency trading as markets reacted to the news. | The dollar fell in Asian currency trading as markets reacted to the news. |
| Mr Obama said he had accepted Mr Summers' decision. | Mr Obama said he had accepted Mr Summers' decision. |
| The president said in a statement: "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." | The president said in a statement: "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." |
| Mr Obama added that he would always be grateful to Mr Summers for his "tireless work and service on behalf of his country" and looked forward to continuing to seek his guidance and counsel in the future. | Mr Obama added that he would always be grateful to Mr Summers for his "tireless work and service on behalf of his country" and looked forward to continuing to seek his guidance and counsel in the future. |
| Market reaction | |
| Analysts said that Mr Summers' decision would leave Janet Yellen as the front-runner to take charge of the US central bank. | |
| Ms Yellen is seen by many as being less inclined towards an immediate and rapid scaling back of the central bank's key stimulus programme known as quantitative easing. | |
| The programme is used by the Federal Reserve to increase pump money into the financial markets in an attempt to reduce the cost of borrowing. | |
| The prospect that the US central bank may begin to wind the stimulus programme down has depressed some stock markets, especially in emerging economies. | |
| The Federal Reserve's rate-setting committee is meeting this week and there is speculation that it will announce it is scaling back the quantitative easing programme. | |
| Analysts said investors were hoping that the decision by Mr Summers, who is seen as a supporter of scaling back the programme, would see it continue at its current pace for some time. | |
| "It had been perceived that if Summers had come into the Fed, he'd have been more likely to remove US policy accommodation quicker," said Sam Tuck, a currency strategist at ANZ. | |
| "Now that he's withdrawn his name there's speculation that policy accommodation withdrawal will take longer." | |
| Shares in emerging economies such as India, Thailand and the Philippines were the biggest gainers. Their main indexes rose nearly 2%. | |
| Stock indexes in South Korea, Hong Kong and Australia also rose. | |
| In the currency markets, the dollar fell to a one-month low, dropping 0.4% against the pound and the yen and 0.5% against the euro. | |
| Senate objections | Senate objections |
| Mr Summers is understood to have faced significant political opposition to his candidacy. | |
| "I have reluctantly concluded that 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,'' Mr Summers wrote in his letter to the president. | "I have reluctantly concluded that 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,'' Mr Summers wrote in his letter to the president. |
| This was seen as a reference to the opposition that his candidacy faced from some influential members of Mr Obama's Democratic Party, including some members of the Senate Banking Committee. | This was seen as a reference to the opposition that his candidacy faced from some influential members of Mr Obama's Democratic Party, including some members of the Senate Banking Committee. |
| Mr Summers was Treasury Secretary during the Clinton administration from 1999 to 2001 and had also been chief economist of the World Bank from 1991 to 1993. | |
| He served President Obama as director of the National Economic Council in 2009 and 2010. | He served President Obama as director of the National Economic Council in 2009 and 2010. |
| Mr Bernanke's term as Federal Reserve chief is due to expire at the end of January 2014. If Ms Yellen is chosen to succeed him, she will be the first woman to hold the post. |