Ireland to skip ECB banking chair battle as top Philip Lane role eyed
Sharon Donnery tipped to succeed governor in Central Bank if he moves to ECB
Philip Lane, governor of the Central Bank, is a holder of a doctorate in economics. File photograph: Cyril Byrne
The Government is unlikely to put a name forward for upcoming openings at the top of the euro-zone’s banking supervision authority, as it concentrates its efforts on securing a European Central Bank (ECB) executive board job for Philip Lane early next year, according to sources.
Deputy Central Bank of Ireland governor Sharon Donnery was reported by Bloomberg on Wednesday to be among potential candidates to succeed the ECB’s banking supervision chair, Daniele Nouy, whose term comes to an end in December.
However, sources said Minister for Finance Paschal Donohoe was unlikely to pitch Ms Donnery as the next head of the ECB Single Supervisory Mechanism (SSM) when he and euro zone consider the matter later this year.
The Government remains focused, instead, on putting Prof Lane’s name forward next year to become an ECB executive board member as Peter Praet, the organisation’s chief economist, retires in May 2019.
Still, Ms Donnery, who also chairs the SSM’s work on non-performing loans across euro-zone banks, is seen as the leading figure to replace Prof Lane should he become Ireland’s first ECB executive board member next year and move to Frankfurt.
That would make Ms Donnery, an economist who joined the Central Bank in 1996, the first internal candidate and first woman to lead the institution since it was set up 75 years ago. It would also give her an automatic seat on the ECB’s rates-setting governing council.
A spokesman for the Department of Finance and spokeswoman for the Central Bank declined to comment.
The ECB is facing a busy period of executive changes as it prepares for a winding down of its €2.6 trillion quantitative easing (QE) bond-buying stimulus programme and return to interest-rate hikes, a decade after the financial crisis began.
ECB president Mario Draghi will step down in October next year, with executive board member Benoit Coeure set to depart three months later. At the SSM, which was set up in 2014 to oversee euro-area banks, Ms Nouy’s exit in December will be followed within months by the ending of the terms of vice-chair Sabine Lautenschlaeger and ECB appointee Ignazio Angeloni.
The Government withdrew Prof Lane as a candidate for the vice-presidency of the ECB in February as the only other person in the race, economy minister Luis de Guindos, had lined up more votes among European colleagues.
Still, members of the European Parliament’s economic and monetary affairs committee said at the time that Prof Lane’s technical expertise on monetary policy shone through as they grilled both candidates in the final stages of the process.
The successor to Mr Praet would not automatically become chief economist, though Prof Lane would be well placed for the position, as a holder of a doctorate in economics.