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The investigation by the ad hoc bank panel found that he had withheld details from senior colleagues, including the bank's top legal officer.
Mr Wolfowitz, who was never popular with bank staff in the first place because of his key role in the Iraq war, was found by a bank panel to have breached conflict of interest rules.
Today's report will help form the basis for discussion at the March 21 meeting of the Federal Open Market Committee, the central bank panel that sets interest rate policy.
Paul Lyman, chief executive of Secure Trust and chair of the British Bankers Associationn's challenger bank panel, said if the Treasury was not ready to make changes it should create a more level playing field.
Now, some bankers, their lobbyists and their Republican allies on the Senate banking committee reportedly would like nothing better than to keep Ms. Warren off the powerful bank panel — where she could do the most harm to the status quo, and the most good for the country.
The 53-year-old will take over from Wolfowitz, who resigned after a special bank panel found he showed favoritism towards his girlfriend, Shaha Riza, a bank employee.
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In addition to Ms. Warren, two other Democrats were named to the banking panel.
Yellen was approved by 14 votes to eight by the banking panel, where Democrats occupy 12 of the 22 seats.
Another former Republican representative, Richard H. Baker of Louisiana, served 12 years as chairman of the House banking panel that oversaw capital markets before he left Congress in 2008.
Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the banking panel, pledged to bring the bill "to the floor of this body in a matter of days".
Mr. McConnell said the Republicans' actions were intended to allow negotiations to continue between Mr. Shelby and Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the banking panel.
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