Nothing, it seems, has become Matthew Elderfield so well as the manner of the departure. As you would hope and expect, the regulator seems to be going to extraordinary efforts to avoid any conflict of interest as he seeks to extract himself from his current job and negotiate a new one.
His refusal to comment, one way or the other, on whether he is talking to Lloyds bank is being interpreted as tacit confirmation that he will be taking up a new role with the UK government-backed lender, which has a significant exposure to Ireland via the defunct Bank of Scotland Ireland.
Should Elderfield land a big and well-paid job at Lloyds there will no doubt be some who will begrudge him his success and point out that he has not finished the job he started. He achieved a lot over the past three years but there is still a mountain of unfinished business.
He may have put in place a plan to force the banks to work speedily through their non-performing property loans, but it now has to be executed. Given the dammed-if-they-do and dammed- if-they-don't nature of the position the banks are in, there will be a significant challenge associated with implementation. It is also looking increasingly likely that something similar may be required to resolve the issue of small- and medium-enterprise bad debts.
Over and above all this sits the requirement for another stress-test of the banks later this year, which will have a very significant read across for the prospects of Ireland exiting its bailout.
When you look at what is sitting in the regulator’s inbox you find yourself hoping that he has been poached by Lloyds, or some other organisation, on a salary that was just too big to turn down.
The less attractive alternative is that he has looked at what is coming down the tracks here and decided it is not worth it, either financially or professionally.
Measure of independence
One of the reasons that Elderfield – and indeed his boss Patrick Honohan – have been so effective is that they have enjoyed a measure of independence unknown to their predecessors. They may not be technically much more independent than their predecessors, but the high stakes over the last few years have meant that the desire or ability of Government to interfere has been low. Both men benefited from the backing of the troika that ultimately called the shots. This could all be about to change by the end of the year.
It would be too much to hope that the nature of Irish politics and public life has changed permanently for the better over the past three years. It is inevitable – and some would argue appropriate – that the regaining of economic sovereignty will mean that domestic and local political factors will have a greater influence on economic decisions.
Already a number of fraught issues – such as the water tax – are being pushed out beyond the end of the bailout. Presumably to allow for political "finessing". The Department of Finance can also be expected to try and reassert the control it once enjoyed – with such disastrous effect – over the Central Bank.
The danger inherent in this can be summed up in one question: Would the regulator have been allowed to seize Quinn Insurance if Ireland had not been in a bailout? The answer is at best a maybe. If the Government had not been answerable to the troika, would they have succumbed to the temptation to kick the can down the road rather than antagonise thousands of voters along the Border? The subsequent behaviour of the Quinns has demonstrated to most people that any responsible Government had no choice other than to remove them from control of the business, but that was far from clear at the time.
It would be naive to think that a post-bailout Government would not be all over a decision like that and possibly seek to influence Elderfield’s successor; which brings us to how he will be replaced.
The recruitment process is under way and the new regulator will be selected by the Central Bank Commission, subject to the approval of the Minister for Finance. The majority of the commission are outsiders, which bodes well for an independently minded successor being chosen.
If we have further reason to be thankful to Elderfield about the nature of his departure, it is that his timing means the Government would have to explain to their paymasters – the ECB, European Union and IMF – a decision not to approve the Central Bank Commission's choice.
