Last night President George Bush named Ben Bernanke, 51, as the new head of the US Federal Reserve.
Mr Bernanke is chief economic adviser to the US government and had been widely expected to replace Mr Greenspan.
Mr Greenspan, who's 79, will step down in January after 18 years running the world's most powerful economy
During his time at the Fed Greenspan has steadied markets during financial crises, driven budget and tax reform, and led the fight against inflation.
The new chairman, who must be approved by the Senate.
The 51-year-old, who is a former Princeton University economist, will take on the job of managing the US budget deficit.
He will also have to decide how best to prevent high oil prices hiking inflation and respond to demands to cut steadily rising interest rates.
US President George Bush's pick to succeed retiring Federal Reserve Chairman Alan Greenspan, commands wide respect in the economics community and has long been the insiders' choice to lead the US central bank.
The vocal backer of formal inflation targets to guide interest rate policy, Bernanke has been the Head of Bush's Council of Economic Advisers since June.
He also served on the Fed Board for nearly three years, gaining practical policy experience to complement his earlier theoretical work as an academic.
Earlier this year, Bernanke said a glut of foreign saving lay behind the record gap in the US current account, an argument that quickly became touchstone in a debate among economists over global economic imbalances. In the same vein, he expressed optimism that global trade and investment imbalances could be resolved without crisis.
Like Greenspan, he believes the Fed is better off focusing on the broad economy than trying to sway asset prices even in the face of building bubbles and has said the Fed should allow banks to fail, except when the wider financial system is in peril.
World stock markets jumped on the nomination of Bernanke.
Tokyo's Nikkei average ended 1.33% higher and on Wall Street, blue chips had posted their biggest one-day point gains in six months, pushing the Dow Jones up 1.66% , while the Nasdaq climbed 1.61%.
