Lawrence Summers, the man tipped to become the next head of the US Federal Reserve, has pulled out of the running.
Although a brilliant economist, Summers has attracted much criticism relating to his support for deregulating Wall Street.
The current chairman of the central bank, Ben Bernanke, steps down in January.
Summers, a former top aide to President Barack Obama, was considered to be the front-runner for the position to replace Bernanke.
But he was dogged by controversies including his support for deregulation in the 1990s when he ran the Treasury Department in the Clinton administration. The relaxing of regulations has been blamed by some for the financial crisis of 2007-2009.
There were also criticisms of comments he made about women’s aptitude while president of Harvard University.
The approval process would have been difficult. Fierce opposition from within Obama’s Democratic Party hurt his chances of being confirmed in Congress.
In a letter to the president, Summers said any confirmation process would likely be acrimonious and a distraction, but it is not clear if he jumped or was pushed.
Summers’ withdrawal appeared to open the door for the nomination of Federal Reserve Vice Chair Janet Yellen, who was seen as his chief rival for the position.
Yellen, who has a long career in the Fed system and also chaired the White House Council of Economic Advisers under former president Bill Clinton, would be the first woman to lead the US central bank.
The US dollar slid while government bonds and shares rallies in reaction to Summers’ withdrawal. That is because investors consider Yellen would take more time to withdraw the Fed’s stimulus measures, which have been pushing up share prices.