* Bernanke renomination good for stability -analysts
* Timing of stimulus withdrawal crucial
By Sakari Suoninen
FRANKFURT, Aug 25 (Reuters) - Ben Bernanke's renomination as the head of the U.S. central bank is the right decision in the face of economic uncertainty, European and Asian analysts said on Tuesday, and even many of his critics believe that now is not the time for change.
President Barack Obama nominated Bernanke for a second term as Federal Reserve chairman on Tuesday. The former economics professor, an expert in the Great Depression of the 1930s, now needs Senate approval.
Most analysts said Bernanke had performed well during the global financial crisis, although some people expressed surprise at Obama's decision due to "sins" of misjudgment, some dating back to the housing boom earlier this decade.
"It helps assure markets that the guy with probably the strongest competence in 1930s and deflation topics remains at the helm," Lloyds TSB economist Kenneth Broux said. "It removes uncertainty and points the direction of policy in the U.S.."
Not everyone was thrilled. A German-based trader, who wanted to remain anonymous, thought the reappointment was a mistake.
"I was surprised that he got nominated for a second term; it shows that he has powerful friends," the trader said, adding that Bernanke's "sins" had been forgotten.
Bernanke's critics say he was slow to cut interest rates as the economy started to deteriorate in 2007, and for failing to spot the housing bubble and push for tougher mortgage lending rules when he on the Fed Board earlier in the decade.
Analysts also said no one should remain in office for too long, if only to make sure the mistakes of his once dominant predecessor, Alan Greenspan, were not repeated.
"It also illustrates the dangers of one person staying in charge too long. Even though you've got to have some continuity, it is good to bring in some fresh blood every now and then," said Browx.
Greenspan, who dominated the Fed as chairman from 1987 to 2006, has come under fire for failing to tackle a series of speculative bubbles which preceded the financial crisis.
Chang Hwa-Tak, economist at South Korea's Dongbu Securities, said Bernanke's renomination was likely to have a positive impact on markets. But he added: "It would be a another question whether he should be reappointed a third time."
STABILISATION AT A PRICE?
Analysts said Bernanke got a raw deal when he was blamed for letting U.S. investment house Lehman Brothers fail last year. "I would not put too much blame on Bernanke; it was not simply a problem that exploded in very short period of time," Broux said.
But signs of fallibility could also work for the good of the world economy. Bernanke is unlikely to attain Greenspan's one-time reputation, now tarnished, as the high priest of finance who should not be questioned.
Many analysts highlighted Bernanke's role in stabilising the world economy this year. "Bernanke has handled the crisis very well and is (held) in high regard by the markets," Khoon Goh, ANZ-National economist in Wellington said.
London-based Tullet Prebon economist Lena Komileva also praised Bernanke's handling of the crisis, saying the Fed's role was more crucial than any other central bank's.
But while the Fed acted fastest of all central banks during the crisis, its hyper-accommodative measures could limit stimulus room for others including the European Central Bank.
"There is a possibility of contagion from the Fed's ultra-accommodative policies," Komileva said. "(They) could impair the ECB's ability to provide further stimulus as needed to keep this recovery on track."
INTERNATIONAL COOPERATION
Bernanke's Fed got high marks for its efforts to make leading central banks pull together during the crisis, and some said he was the intellectual leader of the pack.
"It's crucial to have the most swift and coordinated effort in terms of global financial and economic policies to address the crisis. And the monetary policy of U.S. Fed, led by Bernanke, has contributed a lot," said Dong Xian'an, economist at Industrial Securities in Shanghai.
But he added that Bernanke was above all a U.S. central banker, and other countries should not hesitate to decline to follow Bernanke's lead. "China should not put all its hope on the Fed to safeguard its national interest," he said.
Still, Obama's announcement was no surprise. Komileva said everyone following the markets had expected the outcome. "This was the biggest non-event of the decade," she said.
(Additional reporting by Reuters bureaus around the world) (Reporting by Sakari Suoninen; editing by David Stamp)