* Appointee to BoE regulatory committee faces rare challenge
* Furse criticised over Fortis's purchase of ABN AMRO unit
* Furse still backed to sit on Financial Policy Committee
By Rosalba O'Brien and David Milliken
LONDON, June 5 (Reuters) - British legislators took theunusual step of expressing "serious concerns" about a new Bankof England financial regulator, after challenging her over herrole on a bank board that oversaw a botched takeover deal.
Lawmakers on parliament's Treasury Committee backed thenaming of Clara Furse to the Financial Policy Committee (FPC),but said on Wednesday they had reservations after quizzing herabout her role on the board of Belgian bank Fortis during itspurchase of a stake in ABN AMRO in 2007.
Fortis bought the Dutch operations of ABN AMRO as part of ashared deal with RBS and Santander at the cuspof the financial crisis. The costly acquisition went sour andled to Fortis being bailed out by the state.
At a hearing on Tuesday, in which the Treasury Committeeexamined the appointment of Furse and two other new FPC members,Furse defended her role at Fortis, saying the ABN AMRO buy hadbeen for a "high quality retail banking asset" which had hitfunding problems once the meltdown in global markets began.
"Fortis did not buy a bad bank, it bought a good bank, thatis why I was happy to approve the transaction," she said.
Furse added that the experience "sensitises me to all sortsof extreme risk in a way I think might be quite useful".
EARLY WARNING
The FPC was launched in 2011 as an early-warning system forspotting economic risks, plugging a supervisory gap highlightedby the 2007-2009 financial crisis. It has powers to makerecommendations and direct commercial banks to hold morecapital.
The Treasury Committee, which holds non-binding confirmationhearings for new appointments to both the FPC and the centralbank's longer running Monetary Policy Committee (MPC), said it"expressed serious concerns about the appointment of Dame ClaraFurse".
Those concerns related to her explanation of her role on theboard of Fortis during the takeover and lessons learnt, as wellas her awareness of the importance of asserting the FPC'sindependence, it said.
Furse - who was also chief executive of the London StockExchange between 2001 and 2009 - and fellow FPC nomineesRichard Sharp and Martin Taylor were named by British financeminister George Osborne, and lawmakers were keen to questionthem over how they would show their independence.
The Treasury Committee has held confirmation hearings forthe MPC since 1998, but has rarely spoken out strongly againstnominated candidates and does not have the power to veto them.
In 2000, it called on then-finance minister Gordon Brown toreconsider the appointment of economist Christopher Allsoppafter saying his responses at the hearing cast doubt on hisskills. However, Allsopp went on to join the MPC.
On Wednesday the committee said that despite itsreservations, it concluded that Furse "has the professionalcompetence and personal independence to be an external member ofthe Financial Policy Committee".
It also approved the two other nominees, former Barclays chief Taylor and former Goldman Sachs executiveSharp.
Barclays (BARC)
