President Barack Obama nominated Ben Bernanke to a second term as Federal Reserve chairman today, entrusting him with guiding the economy out of the worst downturn since the Great Depression.
Mr Obama interrupted his vacation on the Massachusetts island of Martha's Vineyard to make the announcement with Mr Bernanke at his side.
Making the announcement, the president said Mr Bernanke had kept the world's largest economy from sliding into a Great Depression.
He praised Mr Bernanke's "outside-the-box thinking" in saving the financial system from collapse.
"The man next to me, Ben Bernanke, has led the Fed through the one of the worst financial crises that this nation and this world have ever faced," Mr Obama said.
"As an expert on the causes of the Great Depression, I'm sure Ben never imagined that he would be part of a team responsible for preventing another. But because of his background, his temperament, his courage, and his creativity, that's exactly what he has helped to achieve. And that is why I am re-appointing him to another term as Chairman of the Federal Reserve.
"Ben approached a financial system on the verge of collapse with calm and wisdom; with bold action and outside-the-box thinking that has helped put the brakes on our economic freefall. Almost none of the decisions he or any of us made have been easy," the president said.
US stock index futures were slightly higher on Tuesday on the news. There was no significant impact on financial markets in Asia and Europe, however, where investors were more focused on whether a global economic recovery was really under way.
"While I have had serious differences with the Federal Reserve over the past few years, I think reappointing Chairman Bernanke is probably the right choice," Senate Banking Committee Chairman Christopher Dodd said in a statement.
Mr Dodd vowed a "thorough and comprehensive" hearing to consider the nomination.
Mr Bernanke, whose appointment to a new, four-year term as head of the US central bank must be confirmed by the Senate, has flooded crippled financial markets with hundreds of billions of dollars in Fed liquidity and stepped in to attempt rescues of failing financial institutions such as Bear Stearns and AIG.
Mr Obama's Democrats control the Senate, but Mr Bernanke has faced criticism from lawmakers of both parties who say he has gone too far in extending Fed support that will be difficult to unwind, threatening future inflation.
Investors have generally given Mr Bernanke high marks on the job and had widely expected him to be kept on by the president although the announcement was not expected until later this year.
Analysts said the early move by Mr Obama - well before Mr Bernanke's four-year term ends on January 31st, 2010 - would be welcomed by financial markets and end any lingering worries about who might lead the Fed as it nurses the economy back to health.
Reuters