The Government has decided to conduct an open competition for the Central Bank governorship with applications to be sought within Ireland and abroad to succeed Patrick Honohan.
The move to seek external candidates contrasts with the approach adopted when the top post in the Department of Finance became vacant last year following the early exit of John Moran, the former banker who was the first outsider to lead the department.
The Government confined the contest to succeed Mr Moran to the upper tier of the Civil Service and made the appointment from within the department itself when ranking official Derek Moran became secretary general.
The development means there will be no automatic changeover – as happened in the past – between the Dame Street headquarters of the Central Bank and Merrion Street, home of the finance and public expenditure departments.
The Central Bank appointment will be closely watched. The institution was overhauled in 2010 in the aftermath of Ireland’s banking crash, which exposed huge and costly weaknesses in its oversight of the sector.
Following on from Prof Honohan’s work to restore the Central Bank’s credibility, it will fall to his successor to underpin domestic and international confidence in the organisation. In addition to other tasks, the Central Bank is charged with ensuring stability in the financial system and with ensuring the effective regulation of banks and markets.
The Central Bank governor is also a member of the European Central Bank governing council, the controlling board of the Frankfurt-based institution. As such the post is important in the European setting: the ECB has been engaged for years in radical action to preserve the single currency and restore economic growth in the euro zone.
With Prof Honohan due to leave the Central Bank by the end of this year, formal expressions of interest in the post will be sought within a fortnight. “In the next couple of weeks, we’ll be commencing the recruitment process,” said the spokesman for the Department of Finance.
Although the vacancy for governor will be advertised publicly, the likely forum remains unclear. Unclear also is whether the Government engages headhunters to sound out potential candidates.
The process will take some time. While there is no pressure to fill the vacancy immediately, candidates of sufficient seniority outside the State system would require a relatively long notice period. President Higgins will make the appointment following a Government recommendation, which itself comes on foot of an initial recommendation by Minister for Finance Michael Noonan.
