Draghi Running Out of Time to Sort ECB Top Jobs as Brexit Looms
Mario Draghi is running out of time to say whether he’ll shake up the responsibilities of his top officials to ensure smooth leadership in the supervision of the region’s banks. The European Central Bank president faces a deadline of Feb. 11, when Executive Board member Sabine Lautenschlaeger’s non-renewable five-year term as vice chair of bank supervision expires. He should technically give the post to another board member and allocate Lautenschlaeger a new portfolio.
The changeover comes at an awkward time though. A new head of the supervisory arm has only just started, and the institution is bracing for an influx of big banks when the U.K. leaves the European Union in March. No board member except Vice President Luis De Guindos, who has been with the ECB less than a year, could serve a full supervisory term before their time on the Executive Board is up.
All that has prompted some ECB policy makers to consider whether Lautenschlaeger’s term could in fact be extended.
A major hurdle is that she has repeatedly told colleagues she’s unwilling to stay, according to people with knowledge of the matter who spoke on condition of anonymity. Lautenschlaeger and an ECB spokeswoman both declined to comment.
Even if she can be persuaded, the ECB risks undermining its credibility by changing its procedures.
“The ECB calls on banks and countries to follow the rules, so it would be surprising if they bent their own,” said Mascia Bedendo, a professor of finance at Audencia Business School in Nantes, France. “I wouldn’t expect Draghi to change them to extend Lautenschlaeger’s term, but exceptional times can call for exceptional decisions.”