This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.bbc.co.uk/news/business-24103970

The article has changed 7 times. There is an RSS feed of changes available.

Version 4 Version 5
Larry Summers pulls out of US Federal Reserve race Larry Summers pulls out of US Federal Reserve race
(about 3 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Former US Treasury Secretary Larry Summers has withdrawn his candidacy to succeed Ben Bernanke as head of the US central bank, the Federal Reserve. Former US Treasury Secretary Larry Summers has withdrawn from the race to be the new head of the US central bank.
In a letter to President Barack Obama, Mr Summers said any confirmation process for him was likely to be "acrimonious". He was among the front-runners to succeed Ben Bernanke as head of the Federal Reserve, one of the most powerful jobs in the US.
Mr Summers was one of the front-runners, along with current Federal Reserve vice-chairman Janet Yellen. In a letter to President Obama, Mr Summers said any confirmation process for him was likely to be "acrimonious".
The dollar fell in Asian currency trading as markets reacted to the news. Mr Summers was thought to be the candidate favoured by the president, but he was opposed by other Democrats.
He 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.
As Treasury Secretary he was in favour of deregulation, which some people consider gives him part-responsibility for the problems in the financial sector that led to the 2008 financial crisis.
Other members of the Democratic Party oppose him because of remarks he made when he was president of Harvard University.
At a conference in 2005 he suggested that women had less innate ability in maths and science than men.
In his letter on Monday he said: "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.''
'Expertise, wisdom and leadership'
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 Mr Summers' withdrawal makes it more likely that current Federal Reserve vice-chairman Janet Yellen will get the top job. She would be the first woman in the role.
Analysts said that Mr Summers' decision would leave Janet Yellen as the front-runner to take charge of the US central bank. Another possible candidate is former Federal Reserve vice-chairman Donald Kohn.
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. Former Treasury Secretary Timothy Geithner has said he does not want the top job at the central bank, although it is rumoured in Washington that the president may try to persuade him to reconsider.
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. Economic stimulus
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 chairman of the board of the Federal Reserve is always a powerful position, but the new appointee will be taking over at a particularly sensitive time.
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. Ben Bernanke will be standing down at the end of January 2014, just as the central bank is starting to cut back on its economic stimulus measures.
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. The Federal Reserve's interest rate-setting committee is meeting this week and is expected to announce how it will scale back these measures.
At the moment it is buying $85bn (£53bn) of bonds a month as part of the quantitative easing programme, which is designed to pump money into the financial markets in an attempt to reduce the cost of borrowing.
Mr Summers was seen as being in favour of scaling back the programme more quickly than the other candidates.
"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."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.""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%. There has been considerable market response to the news of Mr Summers' withdrawal.
Stock indexes in South Korea, Hong Kong and Australia also rose. Emerging economies have been among the beneficiaries of quantitative easing because some of the money pumped into the US system has been spent on government bonds from other countries.
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. As a result, the main indexes in the stock markets in India, Thailand and the Philippines all rose nearly 2%.
Senate objections European stock markets also opened higher.
Mr Summers is understood to have faced significant political opposition to his candidacy. In the currency markets, the dollar fell two fifths of a cent against the euro and 0.3 pence against the pound.
"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. The price of British government bonds rose on the perception that US interest rates were likely to stay lower for longer.
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.
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.