Rehn appointed as Finland's central bank chief and ECB council member

HELSINKI, May 18 (Reuters) - Former top EU economic official Olli Rehn was appointed as governor of the Bank of Finland on Friday, effective from July, the Finnish government said.

Rehn, currently the bank's deputy governor, was widely considered to be the favorite for the top job, which includes a seat on the European Central Bank's interest rate-setting Governing Council.

Rehn, 56, spent a decade at the European Commission, and was the economic and monetary affairs commissioner during the euro zone debt crisis.

This week he sounded a cautious note on the euro area's economic outlook, saying it faced "downside risks" due to uncertainty relating to the public finances and banks of some member countries.

Rehn, who also spent a short stint as Finland's economy minister, will become governor of the Finnish central bank on July 12 for a seven-year term, succeeding Erkki Liikanen who is stepping down after two terms. No major policy changes are expected. (Reporting by Jussi Rosendahl; Editing by Susan Fenton)