Thursday 20 September 2018

Philip Lane and rival face grilling on ECB job

Central Bank Governor Philip Lane
Central Bank Governor Philip Lane

Maria Tadeo and Dara Doyle

The two contenders for the European Central Bank's second-highest post are in for a grilling today.

Philip Lane - Governor of the Central Bank of Ireland - and Spain's Luis de Guindos will come before the European Parliament for informal hearings as they pitch for the vice-presidency, including a seat at the top table as the ECB maps a path out of emergency stimulus.

The Parliament won't choose the final nominee - that decision falls to euro-area finance ministers, with a signoff by heads of government. But legislators get to scrutinise the two men.

Luis de Guindos, Spain's 58-year-old economy minister, is seen as favourite to replace Portugal's Vitor Constancio as ECB vice-president, but he's an unusual choice. Euro-area finance chiefs have never before selected one of their own for the executive board.

That alone has raised concerns at the central bank, whose freedom from political independence is set into law. Mr Guindos also lacks central-banking experience.

What he does have is a history of pushing through the economic restructuring that the ECB says is vital to the currency bloc's long-term health. In his memoir, he described sleepless nights and bust-ups with the European Commission in 2012 as he negotiated Spain's €41bn bailout and reform package.

Mr Guindos's career has had some notable setbacks. He ran the Iberian unit of Lehman Brothers right up until the US bank crashed in 2008. In 2015, he ran to lead the Eurogroup of finance ministers but lost to Jeroen Dijsselbloem of the Netherlands.

Unlike Mr Lane, he lacks an economics PhD. He has also kept his monetary views largely to himself until now.

Ireland is the only founding member of the euro area never to have had a seat on the ECB's board. As nominee, Mr Lane is a 48-year-old economics professor with a reputation for calm pragmatism.

After Blackrock College and Trinity College Dublin, Mr Lane earned his doctorate at Harvard in 1995. He was a professor of economics at Trinity College before becoming central bank governor in 2015. While highly regarded as an economist, including at the ECB, his tenure has been criticised at home, notably for failures surrounding the tracker mortgage-overcharging scandal. (Bloomberg)

Irish Independent

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