* Stats chief Olsen once led Finance Ministry's policy dept
* Governor Svein Gjedrem's second term finishes at end-2010
* Olsen seen as safe choice, may be more hawkish on bubbles
* Norges Bank chief also oversees huge sovereign wealth fund
By Walter Gibbs and Wojciech Moskwa
OSLO, Sept 24 (Reuters) - The head of Norway's statistics agency, Oeystein Olsen, is the favourite to take over as central bank governor when Svein Gjedrem departs the post at the end of the year, analysts and newspapers said on Friday.
If picked, Olsen is seen largely continuing Gjedrem's policy course, analysts said. His five years in charge of the finance ministry's powerful economic policy department has given the 58-year old a reputation as a safe pair of hands with politicians focused on low unemployment.
The deadline to apply for the position was Sept. 23, and Norway's Ministry of Finance is scheduled to release the official list of applicants early next week.
Olsen's six-year term as managing director of Statistics Norway expires at the end of this year.
"Olsen is probably the front-runner," said Kyrre Aamdal, senior economist at DnB NOR Markets.
He said Martin Skancke, head of the finance ministry's asset management department, was another candidate.
Steinar Juel, chief economist at Nordea Markets in Oslo, said Olsen's economic thinking mirrored that of Gjedrem with one exception: a somewhat more hawkish approach to potential imbalances such as asset-price bubbles.
"He might emphasize somewhat more the risk for bubbles and look more at tendencies for escalating debt in the household sector and elsewhere," said Juel. "He is solid."
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Norway has a history of picking people with experience in the finance ministry to run the central bank. Once picked by the government, the Norges Bank governor is independent and sets interest rates as part of a 7-member executive board.
When the financial crisis broke out, Norges Bank slashed the central bank's key rate to all-time low 1.25 percent, but since last October it has raised it in three increments to 2 percent.
Gjedrem has indicated that the bank is considering a new rate hike around the end of this year, though some analysts say it will have to hold off several months longer because of the slow pace of Norway's economic recovery. [ID:nLDE68L1DV]
Earlier this year Olsen's statistics office raised its forecasts for 2010 and 2011 economic growth. [ID:nLDE6810J9]
Under Gjedrem Norwegian inflation has regularly undershot the bank's target of 2.5 percent, and now stands at 1.4 percent.
The governor also has leading roles in securing financial sector stability and overseeing the bank's role as custodian of Norway's vast wealth fund, now nearing $500 billion.
"The oil fund is growing so much that it requires more and more attention from the management of the bank," said Juel.
Three other people rumoured to be in the running for the position -- University of Oslo professor Steiner Holden, deputy central bank governor Jan Qvigstad and former Icelandic central bank governor Svein Harald Oeygard -- all told newspaper Dagens Naeringsliv they did not apply.
Gjedrem has been governor of Norway's central bank, called Norges Bank, since Jan. 1, 1999 and is serving the second and last of his 6-year terms.
(Editing by Patrick Graham)