Economist who warned of banking 'freeze' gets CBI job
Published 25/02/2012 | 05:00
A SWEDISH economist who famously warned over the summer that it "won't take much" for the interbank funding markets to collapse has been appointed as the Central Bank of Ireland's director of economics.
The CBI confirmed the appointment of Swede Lars Frisell yesterday afternoon, and said he would take up his new role on June 1. A spokeswoman for the CBI confirmed his salary, which was described as "competitive" in the job ad, was below the €200,000 pay cap.
The chief economist at Sweden's Financial Supervisory Authority, Mr Frisell made headlines across the globe in August when he warned of the perilous state of the interbank market in an interview with Bloomberg.
Mr Frisell, who also sits on the Basel Committee on Banking Supervision, told the newswire that while the situation "is not that serious at the moment" it "feels like it could very easily become that way and that everything will freeze".
He went on to warn that Sweden's banks needed to "do more" to improve their funding profile, in comments that prompted the Swedish Central Bank's Deputy Governor, Lars Nyberg, to publicly reassure markets that Sweden's banks weren't facing a liquidity crisis.
Mr Frisell's role in the CBI will see him "advising" Central Bank governor Patrick Honohan and deputy governor Stefan Gerlach on a "broad range of economic, financial and monetary policy issues and overseeing the bank's financial stability function", according to the job spec published by the CBI.
His role also includes "planning and prioritising research on economic and financial issues" and presenting the CBI's views on "economic and financial issues" to government agencies, the IMF, OECD, other economic bodies and the press.
"Lars will bring a wealth of knowledge and insight to his new role in the Central Bank," Mr Honohan said last night.