Bush names Bernanke to replace Greenspan

WASHINGTON - President George W Bush today named top economic adviser Ben Bernanke to succeed Federal Reserve Chairman Alan Greenspan.

Greenspan's 18-year tenure at the Fed runs out on January 31.

Bernanke is chairman of the White House Council of Economic Advisers and for months has been seen by many on Wall Street as the leading candidate to succeed Greenspan.

Bernanke served on the Fed's Board of Governors for nearly three years before going to the council in June. His move to the White House was watched with interest by financial markets, with many thinking it might be an audition for the top spot at the Fed.

"He's without question a safe pick, which is probably very high on the White House's list of important things with the nomination of (Harriet) Miers fiasco," said Chris Low, chief economist at FTN Financial in New York.

"Having said that, still, there are some pretty significant differences between Bernanke and Greenspan," Low added.

The announcement comes as the White House has been fending off accusations of cronyism over the pick of Harriet Miers, White House counsel and Bush's onetime personal lawyer, as a Supreme Court justice.

But Bernanke has only been on the White House senior staff for four months and has spent most of his career outside the political realm.

He chaired the Princeton University economics department and built a reputation as one of the country's top academic economists in monetary policy.

Before his nomination to the Fed, many of his Princeton colleagues did not even know he was a registered Republican.

While at the Fed, he advocated steps toward greater policy transparency. He also is a long-time advocate of inflation targets and has argued the central bank could help cement its inflation-fighting credibility by putting a number on its definition of price stability.

"He carries a lot of credibility in the marketplace. He's well-respected in terms of his knowledge and his experience at the Fed," said Alex Beuzelin, senior market analyst at Ruesch International.

Bernanke was confirmed to the Council of Economic Advisers job by a voice vote of the US Senate in June.

Some analysts were concerned that Bernanke might lack sufficient independence, given his current job.

"He worries me as the next Fed head. He's very tied to what Bush wants, too. Having been made the head of the CEA, Bush has gotten to know him, and feels in control," said Josh Stiles, senior bond strategist at IDEAGlobal in New York.

- REUTERS