Monday 19 November 2018

Central Bank's Donnery loses out in bid for top EU banking job

Donnery’s gender was pitted against rival’s ‘experience’. Photo: David Conachy
Donnery’s gender was pitted against rival’s ‘experience’. Photo: David Conachy

David Chance

Central Bank Deputy Governor Sharon Donnery has lost out in the race to become chair of the European Central Bank’s Single Supervisory Mechanism.

The decision may enhance Philip Lane’s chances of taking the post of Chief Economist at the ECB.

Donnery, a more than 20-year veteran at the Central Bank of Ireland and the first woman appointed as deputy governor, is a graduate of University College Dublin where she also did her Masters.

She lost out to Italian central banker Andrea Enria.

The selection process for the job looks set to come under scrutiny after Italian MEP Roberto Gualtieri who chairs the European Parliament’s Committee on Economic and Monetary Affairs said in a letter to ECB President Mario Draghi that politicians backing Donnery favoured her for her gender, while those backing her rival favoured his experience.

Draghi is also Italian and the job will entail supervising Italian banks who were judged among the most vulnerable in the EU in recent stress tests and which could come under greater scrutiny if Rome is reprimanded by the bloc for its budget overspending.

Donnery is Lane’s alternate on the ECB governing council which means that in his absence she would vote on interest rate decisions. She had been the stand in for the supervisory board of the SSM as well.

The ECB has just one woman on its six strong executive board and one woman on its board from national central banks and the decision comes at a time when the economics profession is under scrutiny for its male bias.

By contrast the U.S. Federal Reserve has had a female chair in Janet Yellen and several women serve as presidents of regional Federal Reserve banks, including Mary Daly, an openly gay woman who was recently-appointed head of the San Francisco Fed.

"It is a tribute to Sharon (and, by extension, to the Bank) that she reached the final round of this competitive process and received the endorsement of the ECB governing council and the ECON committee of the European Parliament: this is apt recognition of her career achievements and her capacity to lead at the highest levels," Mr Lane said in a statement.

Ireland withdrew Mr Lane’s candidacy for the post of deputy governor at the ECB in what was seen as a tactical move aimed at bolstering his chances to succeed Chief Economist Peter Praet who is one of Mr Draghi’s closest allies.

If Mr Lane gets the job his economic analysis will have a large role in setting monetary policy in what is effectively the second-most powerful job at the ECB.

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