Bundesbank set for new president

Axel Weber (left) is the youngest Bundesbank president ever

Dr Axel Weber, an economics professor at Cologne University, has become the new president of the German Bundesbank.

He replaces Ernst Welteke, who resigned following investigations into a hotel stay paid for by Dresdner Bank.

Federal Chancellor Gerhard Schroeder and Finance Minister Hans Eichel agreed on the appointment, which was approved by the German cabinet.

Dr Weber is one of the five "wise men" who advise the German government on major economic issues.

At 47, Dr Weber has become the youngest Bundesbank president yet.

The appointment of the father of two, who says he goes running to relax, was praised by analysts.

His "intellectual capacity will increase the weight of the Bundesbank within the Eurosystem", Deutsche Bank economist Thomas Mayer told the business paper Handelsblatt.

His appointment "means that we will retain continuity in monetary policy", said Mr Eichel following the appointment.

"It also means that no one, at any time, has put the independence of the Bundesbank in question."

Euro celebration

Dr Weber's nomination had come as a surprise as other names, such as caretaker Bundesbank governor Juergen Stark, had been in the frame.

Mr Welteke resigned in a row over a Berlin hotel bill

He was appointed after Mr Welteke stood down following a row sparked by a news magazine reporting that he and his family accepted a 7,600 euro ($9,200; £5,000) free stay in Berlin's top Adlon Hotel.

He was attending a celebration of the euro's first year as a cash currency.

Dresdner Bank, a commercial bank, is regulated by the Bundesbank, posing a potential conflict of interest for Mr Welteke.

The Bundesbank board said the resignation was appropriate "with regard to the reputation of the institution and the exercise of its responsibilities".

Alfred Rosenstock at Nomura bank in Frankfurt said the incident had damaged the Bundesbank's reputation.

"There was no clear oversight over Mr Welteke's behaviour - he was allowed to enjoy all that entertainment without any control.," he told the BBC's World Business report.