Ms. Liang, 60, is a fellow at the Brookings Institution. She previously spent three decades on the Fed’s staff, rising to lead a department created after the financial crisis to monitor financial stability.

Image Nellie Liang, who was nominated by President Trump to serve on the Federal Reserve Board, has withdrawn her name from consideration. Credit... Brookings Institution

At the Fed, she helped orchestrate stricter postcrisis oversight of the financial industry, including the creation of annual “stress tests” to determine whether the nation’s banks could withstand a severe economic downturn.

Mr. Trump’s nomination of Ms. Liang was applauded by many current and former Fed officials, who regarded her expertise as a potentially valuable addition to the Fed’s board. The Fed has significantly increased its focus on maintaining financial stability in the aftermath of the financial crisis, when bad bets by big banks helped plunge the American economy into a recession.

But the banking industry has argued that the government overreacted to the crisis and imposed overly restrictive rules that are impeding lending and economic growth. Both the Trump administration and congressional Republicans have pledged to ease the burden of those regulations, despite hefty profits at the United States’ biggest banks. Financial firms had quietly rallied opposition to Ms. Liang’s nomination, arguing that she was not supportive of efforts to recalibrate postcrisis rules.

Jerome H. Powell, the Fed’s chairman, supported Ms. Liang’s nomination and encouraged Senate Republicans to confirm her. But the Senate Banking Committee did not schedule a confirmation hearing in the fall, and Ms. Liang’s nomination expired when the 115th Congress ended this month.