The Government has cleared the way for an early handover of the Central Bank to Prof Philip Lane, the Trinity College Dublin economist who has been nominated governor in succession to Patrick Honohan.
The selection of Prof Lane (46) was ratified on Tuesday by the Cabinet on a recommendation from Minister for Finance Michael Noonan. He will be appointed in coming weeks by President Michael D Higgins.
“The Minister will be appointing Prof Philip Lane to the Central Bank Commission with immediate effect,” said the Department of Finance spokesman.
The commission oversees the bank’s work. “This will ensure a smooth transition from the outgoing governor and should allow Prof Lane to attend European Central Bank meetings and Central Bank Commission meetings.”
Prof Lane holds the Whately chair of political economy at TCD and he has carried out advisory and academic work for numerous international institutions, among them the European Commission and the International Monetary Fund. He has a PhD in economics from Harvard University.
His nomination is seen as a decisive break from the tradition of appointing a top civil servant to run the bank. In his capacity as governor he will sit on the governing council of the European Central Bank, which sets euro zone interest rates and oversees its interventions in financial markets.
Prof Lane is chairman of the advisory scientific committee of the European Systemic Risk Board (ESRB), a body which oversees the stability of the financial system as whole with functions overlapping those of the ECB governing council.
ECB president Mario Draghi chose him for the ESRB post in March, an appointment which came one month before Prof Honohan declared his intention to leave Dame Street.
“Prof Lane’s outstanding economic, financial and policy making record ideally position him to lead the Central Bank in the coming years,” Mr Noonan said. Prof Lane was on a two-man shortlist presented to the Minister after an open selection process, the first for the Central Bank governorship.
The other candidate was Robert Watt, secretary general of the Department of Public Expenditure. Minister for Public Expenditure Brendan Howlin is understood to have pressed for his nomination. He has worked closely with him since the Coalition took power.
“I suppose, entirely selfishly, I have worked very closely with my own secretary general, who, it’s not a secret, was shortlisted,” Mr Howlin said.
