Breaking: Larry Summers Has Withdrawn His Name - He Will Not Chair the Federal Reserve
"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.
"I will always be grateful to Larry for his tireless work and service on behalf of his country, and I look forward to continuing to seek his guidance and counsel in the future," he said.
Earlier the Wall Street Journal reported that Summers had stepped aside as a possible successor to their current Fed chairman Ben Bernanke, citing an acrimonious confirmation process if he was the White House's nominee.
"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 that followed a phone call to the president, the newspaper reported.
However, Summers was dogged by controversies including his support for deregulation in the 1990s and comments he made about women's aptitude while president of Harvard.
Word that the president was leaning toward nominating Summers over Fed vice-chair Janet Yellen elicited an unprecedented amount of controversy for a potential nominee to run the US central bank. Four Democratic senators on the Senate Banking Committee were expected to vote against him if nominated by the president.
Summers is the second high profile potential nominee to withdraw under pressure in Obama's second term. Susan Rice, now Obama's national security advisor, stepped back from consideration to be secretary of state over controversy surrounding her role in explaining the 2012 attack in Benghazi, Libya, that claimed the lives of four US government employees, including the ambassador.