Four candidates remain in race for role of Central Bank governor

Deputy governor Sharon Donnery and senior civil servant Colm O’Reardon tipped on list

 The vacancy at the Central Bank of Ireland arose when governor Philip Lane moved to the European Central Bank. Photograph: Alan Betson/The Irish Times

The vacancy at the Central Bank of Ireland arose when governor Philip Lane moved to the European Central Bank. Photograph: Alan Betson/The Irish Times

 

The competition to find the next governor of the Central Bank has been narrowed down to a shortlist of four candidates, including bookies’ favourite, deputy governor Sharon Donnery, according to sources.

Andrew McDowell, vice-president of the European Investment Bank (EIB) in Luxembourg and a former senior adviser to Enda Kenny when he was taoiseach, is also hotly tipped to have made the list as interviews are set to commence next week.

Colm O’Reardon, deputy secretary general of the Department of Health and former economic adviser to ex-tánaiste Eamonn Gilmore, is believed to have been the most senior figure from the civil service to have put their name forward.

Robert Watt, secretary general of the Department of Public Expenditure and Reform, who made the final round of the last race to find a Central Bank governor in 2015, did not apply.

Sharon Donnery, deputy governor of the Central Bank. File photograph
Sharon Donnery, deputy governor of the Central Bank. File photograph

The early vacancy in the seven-year term of the head of the Central Bank has come about as current incumbent, Philip Lane, was confirmed by EU leaders last month as the next member of the European Central Bank’s (ECB) executive board.

The appointment ends the Republic’s situation as the only founding member of the euro not to have held an executive seat at the ECB.

ECB president Mario Draghi is widely expected to name Mr Lane as his next chief economist, succeeding Peter Praet in the role.

The governor of the Central Bank of Ireland also sits on the governing council of the ECB, which sets monetary policy for the euro zone. The successful candidate will be joining the council at a time of uncertainty over where euro-zone monetary policy is headed.

While Mr Draghi moved last month to push out the prospect of an interest rate hike from the second half of this year until 2020 at least, there has been growing speculation recently that the ECB may be forced into another round of easing amid weak economic data.

The ECB’s deposit rate is now at minus 0.4 per cent, while its main rate has been set at zero for the past three years.

The ECB is also planning to offer a fresh cheap bank-loans programme from September in an effort to stimulate lending in the wider economy.

Andrew McDowell, vice-president of the European Investment Bank and a former senior adviser to Enda Kenny. File photograph
Andrew McDowell, vice-president of the European Investment Bank and a former senior adviser to Enda Kenny. File photograph

The tipped candidates

Ms Donnery, who has been widely seen in political and regulatory circles as the leading candidate for the role, and has had the shortest odds at bookmakers Paddy Power since the outset of the race, would be the first internal candidate to head the Central Bank in its 76-year history, if successful.

An economist by background, Ms Donnery joined the Central Bank in 1996 and lost out last year to Italian economist Andrea Enria in her bid to become the chair of the ECB’s banking supervisory arm.

Mr McDowell, meanwhile, is the holder of a master’s degree in business studies, banking and finance, and a separate master’s in business administration from the UCD Michael Smurfit Graduate Business School.

He served as director of policy with Fine Gael for more than four years before the party took power in 2011. He was economic adviser to then-taoiseach Enda Kenny between 2011 and 2016, before joining the EIB.

Mr O’Reardon, a graduate of Trinity College, Dublin, Cambridge University and the University of Oxford, joined the office of the leader of the Labour Party in 2002 as a policy adviser and went on to become economic adviser to then-tánaiste Eamonn Gilmore between 2011 and 2014.

The Minister for Finance Paschal Donohoe announced in March that the Government was going to conduct an “extensive national and international search” process to find Mr Lane’s successor, with the help of executive search firm Merc Partners.

The panel overseeing the process is comprised of Derek Moran, secretary general of the Department of Finance; Josephine Feehily, chairwoman of the Policing Authority and former Revenue chair; Patricia Byron, a member of the Central Bank Commission; and Nicholas Macpherson, a former permanent secretary to the UK treasury.