Patrick Honohan to step down as Central Bank governor

Central Bank chief plans to depart at the end of the year

Prof Honohan probably wouldn’t step down immediately Photograph: Cyril Byrne / The Irish Times

Prof Honohan probably wouldn’t step down immediately Photograph: Cyril Byrne / The Irish Times

 

Central Bank governor Patrick Honohan is to step down at the end of the year after six years in office, The Irish Times has confirmed.

Prof Honohan (65) is expected to outline his retirement plans at the launch of the Central Bank’s annual report on Friday morning.

The former Trinity College professor, who has held the post since 2009, was brought in to manage the State’s financial sector at the height of the crash.

His tenure as the head of the bank was not due to end until September 2016.

The Central Bank declined to comment.

However, sources said there is no particular reason for Prof Honohan’s decision, noting that he will have served most of his seven-year term by the end of 2015.

Prof Honohan was an outspoken critic of the government when he was appointed by the then minister for finance Brian Lenihan in September 2009.

He previously held the post of Professor of International Financial Economics and Development in Trinity, having spent almost a decade before that at the World Bank as senior advisor on financial sector policy.

Seen as a safe pair of hands and a straight talker, he was tasked with restoring confidence in the State’s banks and economy, and rescuing the Central Bank’s own reputation which had been tarnished by the collapse of the banking sector.

He took command only months after the government had been forced to nationalise Anglo, an admission that the infamous bank guarantee had spectacularly backfired.

Under his watch, the Government effectively nationalised four of the State’s main lenders as it struggled to deal with the hole left on balance sheets from the property crash - a recapitalisation that cost the taxpayer €64 billion.

Perhaps his most famous intervention came in November 2010, when he went on RTÉ radio to declare a State bailout worth “tens of billions of euro” was imminent, in the face of repeated denials by the government of the day.

Prof Honohan, who is a member of the European Central Bank’s (ECB) governing council, also oversaw several rounds of stress tests on each of the surviving banks, and in January this year introduced new lending restrictions aimed at taking the heat out of the property market.

His retirement before the scheduled end of his term means the Government will have to name a successor before the general election , which is due to take place early next year.