(Bloomberg News) The U.S. Securities and Exchange Commission named Craig M. Lewis, a Vanderbilt University professor who has studied market volatility and herd behavior by equity analysts, to be its chief economist and director of a unit responsible for spotting threats to the financial system.

Lewis, 55, who is currently a visiting scholar at the SEC, will assume the new role next month, the agency said today in an e-mailed statement. As director of the Division of Risk, Strategy, and Financial Innovation, he will replace Henry Hu, who stepped down after about a year in that post.

"His two tours as a visiting academic fellow at the SEC give him important insights into the agency's inner workings and uniquely position him to fulfill my vision of the Division," SEC Chairman Mary Schapiro said in the statement

RiskFin, the SEC's first new division in 37 years, was created by Schapiro in 2009 to act as the agency's "think tank."

"I think it's important to have an economist running RiskFin," said Cynthia Glassman, an economist who served as an SEC commissioner until 2006. Glassman said that economists have analytical expertise that many lawyers lack.

Lewis, who has worked in academia for 28 years, will study the economic impact of potential rules, putting him in the middle of an unprecedented level of SEC rule-writing under the Dodd-Frank Act's overhaul.

The agency had been without a chief economist since Jim Overdahl left in March 2010. Shortly before he resigned, the chief economist position was moved from directly reporting to the SEC chairman to working in the RiskFin division.

"This hopefully is a signal that the role of economic analysis within the agency is being enhanced, and I think that's a welcome development," Overdahl, who is now a vice president at NERA Economic Consulting in Washington, said in an interview. He called Lewis an "outstanding economist."

Overdahl said the SEC has faced repeated court challenges over the cost analyses of rules. "Getting the economics right is very important to the agency," he said.