Larry Summers exits race to replace Fed chair

President Barack Obama says he has accepted the decision of his former top economic aide Larry Summers to withdraw from consideration as chairman of the Federal Reserve, the US central bank.

"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," Obama said.

"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.

Summers had been considered a joint favourite along with Janet Yellen, the current vice-chair of the Fed, to succeed the incumbent Ben Bernanke.