Cantillon: ECB’s first woman will be acolyte of no man

The European Parliament is expected to rule today on the appointment of the first woman to the executive board of the European Central Bank. The candidacy of Sabine Lautenschlaeger will then go to the EU Council of Ministers.

It is unthinkable – especially in the current position – that Germany's nominee to replace the departing Jorg Asmussen would fail to secure the necessary support. But the confirmation process has been interesting as all sides try to pigeonhole the incoming central bank as either pro-Bundesbank or pro-Draghi's ECB.

In testimony to the European Parliament’s economic and monetary affairs committee, the specialist in bank supervision has made clear her impatience to see regulation around a single resolution mechanism for addressing banks in crisis finalised this April as planned.

“Furthermore, I hope that we do not have to wait until 2018 for the SRM regulation to come into force but rather that this happens much earlier”, she added.

She also spoke of being “able to resolve a bank over a weekend”.

“So we need to have a structure where it is possible to start a resolution on Friday night and to finish it on Monday morning at 1 o’clock, because then Japan – Tokyo – opens,” she added.

All this puts, as one commentator noted, a “German tint” on the ECB’s position for centralised handling of banks in trouble. In doing so, of course, Lautenschlaeger runs counter to Germany’s more cautious insistence that national governments should retain authority in this area, necessarily making it more cumbersome and diverse.

But ECB president Mario Draghi can be assured he will not have everything his own way as his incoming vice-president expressed wariness about the prospects of the bank activating OMT – its Outright Monetary Transaction policy where, at a member state's request, the ECB would buy that country's its bonds in the secondary market.

And she also displayed a certain hawkishness on of low interest rates.

"In fact, low interest rates may be associated with spurring asset price bubbles," she added, presumably forgetting that it was the fledgling ECB's policy of unrealistically low interest rates to accommodate post-unification, recession hit Germany that was instrumental in building the asset bubble in countries such as Spain and Ireland and fuelling the bank crisis across the bloc.