For the first time, anyone could have applied for the job of Central Bank governor. The race to succeed Patrick Honohan involved a formal search and selection process, though the final decision was still to be made by Minister for Finance, Michael Noonan, in consultation with the Government.
The final two candidates – Philip Lane, an academic economist, and Robert Watt, a senior civil servant – emerged from this process, after a gradual whittling from around 10 serious candidates and a subsequent shortlist of four.
Watt was the bookies favourite and was tipped in Government circles. However Noonan let the interview panel get on with its job and, they believed Lane was the right man for the role.
The panel included: Department of Finance secretary general Derek Moran; NUI Galway economist and former Department of Finance adviser, Alan Ahearne; former Revenue chairwoman and chairwoman of the Policing Authority Josephine Feehily; and former Bank of Ireland chief executive and member of the Central Bank Commission Mike Soden.
While they are believed to have forwarded the two names to the Minister – as would be normal in such situations – Noonan’s discussions with the panel indicated that they believed Lane should get the job.
As late as yesterday, when the issue came to Cabinet, Watt did have some support. Minister for Public Expenditure and Reform Brendan Howlin has worked with Watt as secretary general of his department since the coalition took office four and a half years ago.
“Brendan Howlin was very much advocating for Robert Watt,” one source said. “Michael Noonan said there was a process for the first time, a lot of good candidates but the interview board favoured Philip [Lane].”
Sources said Mr Noonan consulted members of the interview panel after they gave him their shortlist.
In a statement announcing Mr Lane’s appointment, Mr Noonan thanked the interview panel members. Sources said the Minister was confident that the process has led to the selection of the best candidate.
Government sources suggested that while the public portrayal had been of a close race, the interview panel made a clear choice.
In the end they opted for an academic with expertise in monetary and financial economics – directly relevant to the Central Bank job. “Philip is effectively Ireland’s top economist” on the basis of his work and academic citations, according to one source.
A number of sources suggested that this would give him “clout” in Frankfurt, where the key monetary policy and supervisory decisions are taken. He has also played a management role in Trinity, notably in the establishment of a globalisation institute.
Mr Watt is highly regarded by ministers and a number said he would have been a good appointment for the Central Bank. One said he has political nous, as well as administrative and management ability, but added: “I can see why Lane got it.”
In the end, the decision followed the precedent set with the appointment of Patrick Honohan– an academic, even coming from the same university. Mr Lane will hope for somewhat calmer times than his predecessor experienced.
