Wednesday 19 December 2018

Government may hold off on nomination for top ECB job

The Central Bank’s Philip Lane and Sharon Donnery
The Central Bank’s Philip Lane and Sharon Donnery

Dara Doyle

Ireland may not nominate a candidate for a top European Central Bank post next week, despite being the only euro-founding member state never to have had a seat on the executive board.

The head of the Irish Central Bank automatically sits on the ECB governing council, but no Irish nominee has ever been named to the powerful six-person body that proposes and implements monetary policy.

Now, with four of those posts as well as the role as head of the euro area bank-supervision arm up for grabs before the end of next year, Irish Central Bank Governor Philip Lane, 48, and Deputy Governor Sharon Donnery are potential candidates.

An Irish appointment might help shake off the legacy of the banking crisis and bailout.

Still, the politics of European appointments mean the Government here might play a long game. The first step in the ECB reshuffle comes on Monday when euro-area finance ministers meeting in Brussels will collect nominations for a successor to vice president Vitor Constancio.

For that position, Ireland is leaning toward holding off from making a bid as it is unlikely to win, according to two people familiar with the situation. No decision has been made, the people said, asking not be named as the deliberations are private.

Spain has already made its case to regain the board seat it lost six years ago, with Economy Minister Luis de Guindos likely to be a frontrunner.

Instead, Ireland may hold off to stay in the mix for other positions, including the presidency after Mario Draghi steps down in October 2019. Market operations head Benoit Coeure and chief economist Peter Praet will also leave next year.

Another option would be to succeed Daniele Nouy, whose five-year term as chair of the Single Supervisory Mechanism ends this December. The role holds enormous influence overseeing the region's banks, despite not coming with a seat on the board.

The Department of Finance and Central Bank declined to comment.

Philip Lane, a Trinity College professor before being appointed Central Bank governor is a highly regarded economist.

Sharon Donnery joined the central bank in 1996 and became deputy governor in March 2016. She was chosen by Nouy to lead a working group at the SSM on resolving bad loans across euro-region banks. (Bloomberg)

Irish Independent

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