Watts joins the BBA as director of media relations alongside Fiona McEvoy, who arrives as head of campaigns from the Charities Aid Foundation, with both roles newly created.
Both will report to director for external affairs Paul Stephenson, who said the hires were part of a broader process to make the BBA "a less defensive and more proactive organisation".
"In Robert we have someone with a wealth of political and economic experience who can help increase the BBA’s media profile. With Fiona we are looking for someone who can increase strategic and positive messaging, helping us talk more widely about some of the good work banks are doing in society."
The BBA is set to be stripped of its role setting the Libor interest rate following the high-profile rate-rigging scandal that led to RBS being fined £390m and Barclays being fined £290m.
Last year, BBA CEO Angela Knight stepped down from her role, shortly followed by comms head Lesley McLeod, both of whom went to Energy UK.
Knight was replaced by Anthony Browne, who hired Stephenson last year as he sought to make BBA engage more actively with the media.
The creation of the new roles replaces vacancies left by the spring departures of assistant director, strategic comms Brian Mairs and assistant director, media relations Brian Capon.
Watts’ appointment follows nearly two years at The Sunday Telegraph, and thirteen years working at national papers.
McEvoy has been at the Charities Aid Foundation as campaigns manager for a year and five months, and previously worked at Weber Shandwick and the Taxpayers’ Alliance.
The news comes as it was reported today that The Bank of England was set to warn against European Commission plans to introduce a bonus cap for bankers and traders.