NEW YORK — Former Citigroup co-chairman John Reed was named interim chairman of the New York Stock Exchange on Sunday, temporarily succeeding deposed chairman Richard Grasso, who resigned five daysago.

Reed, 64, was at the top of a list of 12 candidates for the interim chairmanship, said NYSE director Laurence Fink, who chaired the NYSE board’s search committee.

How long he’ll remain in the job is unclear. Peter Fisher, the outgoing undersecretary for domestic finance at the Treasury Department, has emerged as a leading candidate to be Grasso’s permanent successor.

Reed, a respected executive, faces difficult challenges in the wake of Grasso’s forced resignation amid criticism over a $140 million compensation package. The Grasso controversy has focused attention on the ability of the board to govern the world’s largest stock market when many directors represent major Wall Street firms.

At least four NYSE directors turned down the interim chairmanship, according to people knowledgeable about the board’s search efforts. In the NYSE’s statement Sunday, Fink was quoted as saying Reed was the only person offered the job.

Reed resigned as chairman and co-chief executive of Citigroup in April 2000, after losing a power struggle with current Citigroup Chairman Sandy Weill. Reed was chairman and CEO of Citicorp before its merger with Travelers Group in 1998.

People close to the board say Reed’s selection underlines the NYSE’s commitment to internal reform measures.

Reed, who participated in a news conference Sunday by telephone from a vacation site in France, said he would be paid $1 for the job. He will join the exchange on Sept. 30. Scheduled to leave his Treasury job Oct. 10, he says he is unwilling to comment publicly on his interest in the NYSE job while he is still employed at the Treasury.

People close to the NYSE board — where Fisher has several backers — say he’d be willing to take the top job as long as the Big Board’s regulatory and trading arms are not split into two. That idea is one of several proposals under consideration for strengthening the NYSE’s governance.

Fisher is a respected figure on Wall Street. While overseeing financial markets at the New York Federal Reserve, he helped orchestrate the 1998 bailout of Long-Term Capital Management, the powerful hedge fund whose collapse threatened world markets.

People familiar with the situation say Fisher’s mastery of financial markets and public policy make him a first-rate candidate to replace Grasso.