Mary Schapiro has been at the forefront of financial regulation in the US for 20 years, serving under four presidents before her appointment to the SEC by Barack Obama last night.

Ms Schapiro, 53, trained as a lawyer, and is a graduate of Franklin and Marshall College in Pennsylvania and George Washington University. It was during her time as a law student that she decided to pursue a career in regulation, after alleged manipulation pushed up the price of silver.

She worked as an attorney within the futures industry and helped to write new Government policy and regulations on the derivatives market following the stock market crash on 1987.

She has already held senior positions at the SEC. She served as Commissioner for six years: she was appointed by President Reagan in 1988, re-appointed by the first President Bush in 1989, and named Acting Chairman of the watchdog by President Clinton in 1993.

It will not be the first time Ms Schapiro has headed a regulator at a time of financial crisis.

In the mid-1990s, as chairman of the Commodities Futures Trading Commission (CFTC) she steered the organisation through the upheaval which followed the collapse of Barings Bank, brought about by the rogue trading of Nick Leeson.

In 1996, she arrived at the National Association of Securities Dealers (NASD) as the self-regulatory organisation was under fire for failing to police brokerage firms.

In 2005 she oversaw a wide-reaching probe into gift-giving and entertaining on Wall Street, which uncovered several instances of lavish and excessive activities, and led to many charges.

During her tenure at the NASD she won respect for strengthening the agency's enforcement, and for supervising the creation of the Financial Industry Regulatory Authority (Finra), the organisation she currently leads.

Finra, the largest non-governmental regulator for all securities firms in business in the US, was formed in 2007 through the consolidation of NASD and the New York Stock Exchange Member Regulation.

In January this year, President Bush appointed her to his Advisory Council on Financial Literacy.

As the Madoff scandal, potentially the largest corporate fraud in history, engulfs Wall Street, Ms Schapiro will not be immune from controversy. It emerged that in 2001 she appointed Mark, one of Mr Madoff's sons and a senior employee at the family firm, to serve on the board of the National Adjudicatory Council — the division that reviews disciplinary decisions made by Finra.

She also sits on the boards of Duke Energy and Kraft Foods, but as chairman of the SEC she will have to relinquish these positions. She will be the first woman to hold the role at the watchdog on a permanent basis.

She is in line for a drop in pay. In 2001 she took home $2.1 million from the NASD; at the SEC the annual salary for the chairman is $158,500.

Her appointment has prompted speculation that the SEC and the CFTC may be merged, a move that would create an umbrella organisation for regulation of all capital markets, and make Ms Schapiro one of the most powerful financial regulators since the SEC during the Great Depression.

President Roosevelt created the Wall Street watchdog in 1934 in an effort to inject confidence in the financial markets. More recently, Ms Schapiro has touched on the motivation behind this mission. In a speech in October last year, she said: "Investors can understand and accept a tech bubble or a recession - they go with the territory of a free market. What they won't accept is a system they can't trust. That's why it's so important for all of us to work together to safeguard that sense of trust and foster confidence among investors."

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