Donohoe briefed to warn new Central Bank governor to watch costs

‘Onus to focus the Central Bank on a post-Brexit environment,’ briefing notes says

Minister for Finance Paschal Donohoe was briefed by his officials to warn the new governor of the Central Bank to keep a close eye on costs, according to documents released under freedom-of-information legislation.

The warning came in advance of the Minister's meeting with Gabriel Makhlouf, who paid a two-day visit to Ireland ahead of taking up his role full time on September 1st.

“It is understandable that the cost base of the [Central] Bank has risen with the increase in regulatory reach and powers. However, it is important to keep a focus on costs, particularly given the Central Bank is within the wider public sector,” the briefing notes state.

“It will be a significant challenge in itself to provide clear direction and leadership to 2,000 staff who are spread across very diverse functional areas. Your experience in leading significant organisations will play an important role.”

The note also suggested to the Minister that he impress upon the governor that “there is now an onus to focus the Central Bank on a post-Brexit environment”.

The "introductory meeting" was part of a series of meetings where Mr Makhlouf also met Central Bank Commission members and officials, and followed on from telephone calls between Mr Makhlouf and the Minister's office.

Also included in the documents was a note about how the role of governor of the Central Bank was a “challenging” one he was confident that Mr Makhlouf ‘s “extensive experience” would lead him to excel in it.

In possible speaking points for the meeting, the Minister was guided to stress the independent status of the Central Bank, its co-operation with the Department of Finance, his dual role as governor and chairman of the Central Bank Commission, and the Tracker Mortgage Examination Final Report, among other issues.

Mr Makhlouf took up his €286,790-a-year role at the Central Bank this month, having previously served as secretary to the treasury in New Zealand.


Earlier this year the New Zealand State Services Commission conducted an investigation into Mr Makhlouf following his handling of a controversy over leaked budget details in May this year.

Mr Makhlouf initially said the leaks resulted from systematic and deliberate hacking and called in the police to investigate. However, it emerged that the budget was accessible through the search function on the department’s own website.

An investigation by the commission into the statements and actions taken by Mr Makhlouf criticised his “clumsy” handling of the leaks but found that he “acted in good faith, reasonably and in politically neutral manner”.

Last month The Irish Times reported that Mr Donohoe had received a confidential review into Mr Makhlouf from the New Zealand government. The Department has refused to release the 18-page report despite calls to do so from the Opposition.