Sunday 22 September 2019

Brexit and trade top challenges for new governor

Governor Gabriel Makhlouf
Governor Gabriel Makhlouf

David Chance

Gabriel Makhlouf, the new governor of the Central Bank, started his first day at work yesterday with a call "to strengthen the resilience of the financial sector and the economy" as Brexit and possible trade shocks loom.

In an email to staff, Mr Makhlouf, who arrived on the back foot following the fallout from his handling of a New Zealand budget leak in May, said the Central Bank needed to strengthen protections for consumers, a message that comes hard on the heels of a €1bn mortgage mis-selling scandal.

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"Tensions in international trade and the global economic outlook also frame the Irish and euro-area macroeconomic environment," Mr Makhlouf wrote.

The new governor will be going to Frankfurt in less than two weeks for a meeting of the European Central Bank as it gets ready to reverse policy and embark on new interest rate cuts as Europe's economy weakens.

There is also political pressure for tough mortgage rules to be relaxed and these are subject of a review that kicks off now.

After the missteps in New Zealand, he will need to convince the staff at the bank, the public and the Minister for Finance that he is up to the job.

In a letter to Paschal Donohoe ahead of his arrival, Mr Makhlouf said he could have addressed the budget leak scandal "more clearly and with a different emphasis".

He should, however, expect to have an ally in the ECB - former Central Bank of Ireland Governor Philip Lane is now chief economist.

Irish Independent

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