Academic takes the hot seat as Central Bank's Governor
The Government has appointed a highly-regarded academic with international consulting expertise but little executive experience as the new Central Bank governor.
Professor Philip Lane (46) of Dublin's Trinity College will take over from Patrick Honohan who is set to retire next month. Finance Minister Michael Noonan announced the appointment yesterday after a recruitment drive that attracted more than 100 applicants from home and abroad.
Professor Lane was in contention for the top role along with the head of the Department of Public Expenditure and Reform, Robert Watt.
Prof Lane, who holds a PhD in economics from Harvard, has been teaching in Trinity since the late 1990s, where he came from Columbia University.
The Department of Finance said Prof Lane has been appointed, with immediate effect, to the Central Bank Commission, to allow for his attendance at both meetings of the European Central Bank and Central Bank Commission.
Although Professor Honohan, who was paid €197,000 last year after a voluntary pay cut, is due to retire next month, a date has not yet been set. He will remain for now a member of the ECB's governing council.
Finance Minister Michael Noonan said Prof Lane's "outstanding economic, financial and policy-making record ideally position him to lead the Central Bank in the coming years".
"Prof Lane was chosen as the Government's nomination to the position of Governor following an extensive national and international executive search process to identify suitably qualified candidates in Ireland and abroad," he said. "This was undertaken due to the unique importance of the position of Governor of the Central Bank to the Irish financial system and the Irish economy."
His colleague at Trinity, professor of finance Brian Lucey, said his appointment reflects a changed role.
"The days when the Governor of the Central Bank of Ireland was only concerned with domestic mortgages and banks is long gone," he said.
"This person has a role in a European level, and the more credible the Irish governor is, the more intellectually able, and the more recognised they are in the fields of international economics and central banking, then the more likely they are to be given a sensible hearing."
Prof Lucey said that under Mr Honohan's stewardship, the Central Bank has professionalised its top management.
"They have good structures to manage the system. Lane has almost no managerial experience, but that's not really what he's been hired for, so that's not something they need to worry about too much," he said. He described Prof Lane as a "quiet enough type of guy".
Prof Lane was in direct competition with senior civil servant Robert Watt, from the Department of Public Expenditure. Had he been appointed, it would have marked a return to the pre-crisis tradition of having a civil servant in the role.
Public Expenditure Minister Brendan Howlin paid tribute to both candidates. "I am obviously convinced that Prof Lane is eminently qualified and will make a very fine governor," he said.
"I suppose, entirely selfishly, I have worked very closely with my own secretary general, who, it's not a secret, was shortlisted.
"And I'm very happy that he is going to continue to work with me, to continue the path to recovery that we've worked on together for the past five years."