A student of the Great Depression, Mr. Bernanke used the Fed’s powers in ways that few thought possible.
Under his watch, the Fed absorbed the assets of stressed financial firms Bear Stearns Cos. and American International Group Inc., and it created several emergency lending programs that pumped hundreds of billions of dollars into a financial system that had been shattered by the collapse of Lehman Bros. Holdings Inc. in September, 2008. Mr. Bernanke dropped the Fed’s benchmark interest rate to zero, and when that didn’t work, he persuaded his fellow policy makers to adopt QE.
Not everyone is as complimentary of Mr. Bernanke’s efforts as Mr. Obama. At every step, Mr. Bernanke was forced to overcome opposition, including within the Fed. Thirty of 100 senators voted against his re-nomination in 2010, representing the narrowest victory for any Fed chairman.
If history is any guide, Mr. Obama will pick a candidate to succeed the onetime Princeton University professor some time during the summer, allowing ample time for the Senate to consider the nominee before a final confirming vote.
Here is a quick look at the likely leading choices:
Ms. Yellen, 66, has been Fed vice-chair since 2010 and is viewed as a strong contender to be the next Fed chair. A Reuters poll on June 12 found that an overwhelming majority of economists predicted she would get the job.
Ms. Yellen has been a forceful advocate of the aggressive steps taken under Mr. Bernanke to spur U.S. economic growth, earning her a reputation as a policy “dove” who would tolerate a bit more inflation to drive down unemployment that she deemed too high.
If picked to succeed Mr. Bernanke, she would become the 100-year-old central bank’s first female chief. Before her current post, Ms. Yellen was president of the Federal Reserve Bank of San Francisco. She was chairman of the White House Council of Economics Advisers under president Bill Clinton and a Fed board governor in Washington from 1994 to 1997.
A former professor at the University of California, Berkeley, Ms. Yellen has a high standing among other academics. She began her career as an assistant professor at Harvard University in the early 1970s before shifting over to the Fed.
Mr. Summers, 58, is a Harvard economist who was Mr. Obama’s first National Economic Council director, a post within the president’s inner circle. He also was Mr. Clinton’s Treasury secretary after holding other senior posts in the department.
Viewed as brilliant but prickly, Mr. Summers was a full Harvard professor by the age of 28 and later became president of the university. But his nomination might be controversial, in large part because of his reputation for rubbing people the wrong way.
In a notable episode in 2005, he was heavily criticized for suggesting there were fewer women than men in science and engineering because of a lack of aptitude. Many saw the remarks as sexist; Mr. Summers said he was trying to stimulate debate.
That said, his expertise, professional accomplishments and his service to Mr. Obama are likely to earn him serious consideration for the top Fed post.
Since leaving the Obama White House in 2010, Mr. Summers has returned to teaching at Harvard, joined the boards of several private companies and become a part-time special adviser to venture capital firm Andreessen Horowitz. He also worked for hedge fund D.E. Shaw from 2006 until November, 2008, when Mr. Obama picked him to run the National Economic Council.
Timothy Geithner, 51, was Mr. Obama’s first-term Treasury secretary. He is also seen as a possible contender for the Fed nomination, but has said that he does not want the job.
If Mr. Geithner could be persuaded to change his mind, his track record is compelling. Before he was tapped for Treasury, he was already at the centre of the nation’s emergency response to the financial crisis as head of the New York Federal Reserve Bank.