Sunday 23 October 2016

Central bank Governor Patrick Honohan to retire this year because it's the 'right time to go'

Central Bank also reported profits of €2.1bn at the launch of its annual report today.

Colm Kelpie and Caroline Crawford

Published 01/05/2015 | 11:23

Central bank Governor Patrick Honohan has said he is leaving his post because it is the right time to go.

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Mr Honohan said he told Finance Minister Michael Noonan of his plans in the first week of April.

"I will have been in the job over six years. It is a seven year term so I could stay on. But I've long been asking myself when is the best moment. I'm not getting any younger. I said to the staff this morning. I had planned to give a little video to the staff, but it didn't work out like that. "

Mr Honohan will retire later in the year.

The Central Bank also reported profits of €2.1bn at the launch of its annual report today.

It added that €1.7bn of this profit is being paid back to the Exchequer.

Taoiseach Enda Kenny has praised the work of Mr Honohan, describing him as refreshing and enthusiastic to deal with, and he commended his dedication to the job.

“Patrick called to see me yesterday and he informed me that it was his intention to announce his retirement at the annual report of the Central Bank and that’s his choice. He’s doing that because he feels that now is the right time for him to leave.

“I would like to say that in my experiences with Patrick Honohan I’ve always found him refreshing, I’ve always found him very enthusiastic and all the decisions he made, whether you agree with them or don’t were taken in a very deep-founded belief to be in the interests of Ireland and of its people so I wish him well,” he said.

Speaking in Castlebar at the launch of the announcement of a significant new broadband investment for the town, Mr Kenny said Mr Honohan had been dedicated to what is a difficult role.

“It’s a complicated job, 1,400 people working in the Central Bank and you need accountancy skills, management skills and business skills. I think Patrick Honohan did a really dedicated job for Ireland and I wish him well in his decision and in his future years,” he added.

Meanwhile, Finance Minister Michael Noonan said: "The departure of Professor Honohan marks the end of an era.

"His clear thinking, leadership and wise counsel helped to steer the country through some of our most difficult times and he has also guided the reform of the Central Bank following the financial crisis.

"He has left an enduring legacy in his contribution to the stability of the country which is now beginning to strengthen and grow. On behalf of the Government I would like to thank Governor Honohan for his major contribution to public life and to wish him well in his future."

Prof Honohan was appointed governor by Fianna Fail’s Brian Lenihan in 2009, despite his stint as economic advisor to former Fine Gael Taoiseach Garret FitzGerald.

Read more here; Central banker Honohan quits early as Trichet remains defiant  

It was Prof Honohan’s expertise of the political system combined with a decade of experience at the World Bank in Washington that convinced Mr Lenihan to pluck him from the relative obscurity of Trinity College’s economics department.


Mr Lenihan wanted to restore Ireland’s reputation by naming outsiders to top posts.

Prof Honohan’s political skills were seen in his decision in 2012 to take a voluntary pay cut of €63,000 to reduce his salary to €213,000.

 This meant that his deputy, who did not take a pay cut, earned €120,000 more than he did.

Prof Honohan’s Central Bank has struggled with regulation in some areas such as the credit unions and insurance companies such as RSA where regulators uncovered major problems last year.

The regulator has also failed to force banks to forgive mortgage holders who are in arrears.

He also attracted controversy recently when he wrote to banking inquiry to ask for a second opportunity to present evidence about the bank guarantee.

He told the inquiry that he had a “senior moment” when he told them during an earlier appearance that Anglo Irish should have been allowed to fail.

He later played down the significance of the bank guarantee, telling the committee that 80pc to 90pc of the country’s problems were already “inescapably embedded in the situation”.

Prof Honohan was appointed head the Central Bank shortly after the guarantee.

He later went on to help the Government nationalise the country’s main lenders and close Quinn Insurance.

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