Wall Street vs Washington

George Bush has a choice between a Wall Street investment banker and a Washington insider when it comes to finding a successor to Paul O'Neill. The market would prefer one of its own, but suitable candidates are thought to be thin on the ground.

One of few names in the frame from banking is Charles Schwab, whose company is one of just a handful of big share broking firms not tainted by allegations of conflicts of interest. Another possible candidate is Stephen Friedman, an ex-chairman of Goldman Sachs and a colleague of former treasury secretary Robert Rubin.

Mr Rubin won the respect of the markets for his strong dollar policy, but Mr Bush is prob ably hoping that the next treasury secretary is prepared to quietly allow the greenback to weaken to kickstart the faltering economy. Several Washington insiders with the required degree of pragmatism have been suggested, including former US secretary of state James Baker, who served as head of the Treasury under Ronald Reagan, current commerce secretary Don Evans, and Bill Archer, former chairman of the influential ways and means committee in the house of representatives.

Mr Bush could choose to promote Glenn Hubbard, who currently heads his council of economic advisers, or John Taylor, the under-secretary for international affairs. Both are respected academics. Deputy secretary Ken Dam is also thought to be a likely candidate.