The Wall Street Journal has a good write-up today on the withdrawal of Annette Nazareth as deputy Treasury Secretary. An excerpt:

Some on Wall Street had raised concerns in the Senate over Ms. Nazareth’s role as the founder of the SEC’s Consolidated Supervised Entities program, which was created in 2004 to coax global investment banks to voluntarily submit to regulation, according to people familiar with the matter.
The five major investment banks no longer exist. They have either been acquired, filed for bankruptcy protection or reorganized as regulated banks. Many people cite their ill-advised bets on the mortgage market as one cause of the financial crisis.
The program was abandoned in September 2008 after then-SEC Chairman Christopher Cox declared it “fundamentally flawed from the beginning.”
Ms. Nazareth’s role in creating the program had come to the attention of the Senate Finance Committee. Because her nomination hadn’t been formalized, any effort to delve into her role in the failed regulatory regime never got beyond the early stages.

So, with this on her resume, why was she a candidate as Geithner’s deputy in the first place? For one thing, she had the backing of Chuck Schumer. From the New York Times in 2005:

Democratic senators are pushing for the nomination of Annette L. Nazareth, director of market regulation at the Securities and Exchange Commission, for one of the five S.E.C. commissioners.
Senator Harry Reid, Democrat of Nevada and the Senate minority leader, will send a letter to the White House today recommending Ms. Nazareth for the position, people briefed on the senator’s plan said last night.
The composition of the commissioners — two Democrats, two Republicans and a chairman — is critical to the outcome of many rules and enforcement actions affecting corporate America and Wall Street. In the past, the Bush administration has accepted nominees for the Democratic seats from the Democratic leaders in the Senate.

She did become one of the commissioners. But here’s another hint to her popularity. Her husband, Roger Ferguson, was the former Vice Chairman of the Federal Reserve’s Board of Governors, and he would have worked with Tim Geithner in the past. At one point, Fergusson was mentioned as a potential replacement for Alan Greenspan. After leaving the Fed, Ferguson went to Swiss Re where he had a problem in his unit with subprime mortgages and credit default swaps. New York Times from 2007:

LONDON, Nov. 19 — Swiss Reinsurance, the world’s biggest reinsurer, said Monday that it had taken a $1.07 billion write-down on the value of some derivatives backed by mortgage securities.
The announcement unsettled investors, coming two weeks after the company said its exposure to problems in the American subprime mortgage market would be limited. Its share price dropped the most since March 2003.
Swiss Re, whose financial services division is run by Roger W. Ferguson Jr., a former governor of the United States Federal Reserve, said that it incurred the losses, which it called deeply embarrassing, when it sold two credit-default swaps as protection against declines in the value of investments mainly backed by mortgages.
While some analysts expect large investment banks to announce further write-downs, the effects on insurance companies have been expected to be limited because their exposure to mortgage-backed securities was thought to be smaller.

The question really should be why it took President Obama so long make a decision on Nazareth, as it looks like there were too many conflicts right from the beginning. And if this pick originated with Tim Geithner, isn’t this another indictment of his judgment?