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Thursday 19 January 2017

Key Central Bank figure in crisis to retire

Emmet Oliver Deputy Business Editor

Published 04/03/2011 | 05:00

Arriving for a meeting of the Oireachtas Joint Committee on Economic Regulatory Affairs at Leinster House were, from left, Central Bank principals Tony Grimes, Tom O'Connell, and former governor of the Central Bank John Hurley
Arriving for a meeting of the Oireachtas Joint Committee on Economic Regulatory Affairs at Leinster House were, from left, Central Bank principals Tony Grimes, Tom O'Connell, and former governor of the Central Bank John Hurley

One of the key figures in the lead-up to the banking crisis and number two at the Central Bank is set to retire, allowing current governor Patrick Honohan to put his stamp on the top of the organisation.

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Tony Grimes, who worked closely with former governor John Hurley, is retiring this summer. Mr Grimes was present at a range of the key meetings in 2007 and 2008 when the government was preparing its response to the banking crisis.

The Central Bank has been criticised in many quarters for its response in 2008 and also for its weak warnings about the strength of the property bubble which was inflating prior to 2007.

The forthcoming report on the banking crisis by Finnish expert Peter Nyberg is expected to look closely at the role of the Central Bank.

The new recruit will operate at the same level as the financial regulator Matthew Elderfield, who is effectively a deputy governor of the Central Bank.

The requirements of the job are extensive and include "extensive knowledge of monetary and financial policy'', particularly in the eurosystem. This is likely to exclude a large number of Irish candidates.

The successful candidate will be given a five-year contract. Academics and those from commercial banking are likely to be interested in the role.

The appointment of Dr Honohan was a break with tradition whereby governors of the Central Bank were usually serving secretary-generals of the Department of Finance.

Under reforms brought in by Finance Minister Brian Lenihan, this link was broken and Dr Honohan, a Trinity College academic, was appointed.

Asked what the salary would be for the new deputy govenor, a spokesman said it would be "commensurate with the position's level of seniority and responsibility''.

Irish Independent

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