Charlotte Hogg has been appointed by the Treasury as the deputy governor of the Bank of England in charge of markets and banking.
Ms Hogg, 46, who is currently the Bank's chief operating officer, replaces Minouche Shafik, who is departing to become director of the London School of Economics.
As deputy governor for markets, Ms Hogg will sit on the most powerful policymaking committees of the Bank: the Monetary Policy Committee and the Financial Policy Committee.
She will also have a place on the board of the Prudential Regulation Authority and the Bank's governing Court.
The three other existing deputies to the Governor Mark Carney are Ben Broadbent, covering monetary policy, Sir Jon Cunliffe, covering financial stability and Sam Woods, for prudential regulation.
The Chancellor, Philip Hammond, said: "Charlotte has done an excellent job as the Bank’s first Chief Operating Officer. She will take over this new role at a key time for the City."
She will continue in her role as chief operating officer, the Bank said.
Ms Hogg's renewable five year term is effective from 1 March.
Before joining the Bank in July 2013 Ms Hogg was a banker at Santander, having previously worked at the management consultants McKinsey.
Upon arriving at the Bank four years ago she commissioned a six-month internal review of its operations by McKinsey, which resulted in the "One Bank" strategic plan.
Mr Carney said: "Charlotte’s breadth of financial sector and operational experience will contribute valuable, broader perspectives to the Bank’s policy committees. I look forward to working with her in her new role".
The Bank of England separately announced today that Kristin Forbes, an external member of the MPC, will leave on 30 June after serving three years on the rate-setting committee.
Ms Forbes, an American academic economist, earlier this week said she is close to voting for an increase in interest rates.
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