WASHINGTON, Oct 24: President George W. Bush on Monday nominated his economic adviser Ben Bernanke as the new Federal Reserve chairman, saying the economist “commands deep respect from the global financial community.”

Bernanke, if confirmed by the Senate, would replace Alan Greenspan on January 31, who will step down after 18 years in one of the most powerful economic posts in the United States.

Bernanke was a member of the Federal Reserve before moving to the White House earlier this year to head Bush’s Council of Economic Advisers. He previously served as the head of the economics department at Princeton University.

“He’s earned a reputation for intellectual rigour and integrity,” Bush said in a brief White House appearance with Bernanke.

“He commands deep respect in the global financial community. And he’ll be an outstanding chairman of the Federal Reserve.”

Bush acknowledged that Bernanke would have difficult shoes to fill after the tenure of Greenspan.

“For nearly two decades, Chairman Greenspan has shepherded our economy through its highs and its lows,” Bush said.

“Under his steady chairmanship, the United States economy has come through a stock market crash, financial crises, from Mexico to Asia, two recessions, corporate scandals, and shocks ranging from devastating natural disasters to a terrorist attack in the heart of America’s financial centre.”

Bush added that “Ben Bernanke is the right man to build on the record Alan Greenspan has established.”

Bernanke, 51, has a reputation for political independence. He also has been a proponent of specific inflation targets as used by other central banks, but opposed by Greenspan.

In a speech in November 2002, Bernanke laid out an aggressive Fed strategy to ward off deflation. In addition to rate cuts, Bernanke said the Fed had a variety of weapons to ward off deflation, including purchasing Treasury bonds back from the market.—AFP