Respected economist with wide experience

Patrick Honohan is an economist with a deep knowledge of Ireland and a sense of good cheer, writes COLM KEENA

PROF PATRICK Honohan, who is to take over the position of governor of the Central Bank this month, is a widely respected academic economist whose career has including involvement in the implementation of public policy.

His father, William Honohan, was for 20 years secretary of the department of social welfare and a founder of what is now the Economic and Social Research Institute (ESRI).

Patrick Honohan’s brother, Edmund Honohan, who is Master of the High Court, said yesterday that the family home in Glasnevin, Dublin, was one where economics and public service were both prominent ideas.

Prof Honohan will move from his position as professor of international financial economics and development at Trinity College, Dublin, to take on his new position.

He will have responsibility for both the Central Bank and financial regulation functions, which have been separate since May 2003, and which are now to be remerged.

Since moving from the World Bank to take up his position in Trinity in 2007, Prof Honohan has written a number of academic papers and newspaper articles about the Irish economy and in particular the ongoing banking crisis.

In 2006, when he was still with the World Bank, he wrote a paper with Anthony Leddin of the University of Limerick in which they pointed out that Ireland had undergone a sharp deterioration in international competitiveness since 2002, but that the effects of this on employment had been hidden by the property boom.

In more recent times he has written about the Government’s September 2008 guarantee scheme for the banks, which he noted was more generous than schemes initiated in other jurisdictions, and the proposals for the creation of the National Asset Management Agency (Nama) to deal with the banks’ bad loans. He has suggested how the risks involved might be better shared with the banks.

He has also held regular meetings with officials from the Department of Finance and with Minister for Finance Brian Lenihan.

Born in October 1949, he attended the Irish language Christian Brothers school Coláiste Mhuire, and then UCD, where he graduated with a first-class honours degree in economics and mathematics. He studied for a masters and then a PhD in the London School of Economics.

He worked for the International Monetary Fund in the early 1970s, and the Central Bank from the mid 1970s to the mid 1980s.

He acted as economic adviser to Dr Garret FitzGerald during his governments in the early and mid 1980s. (His brother Edmund acted as an adviser to the late Jack Lynch). He worked for the World Bank in Washington in the late 1980s before taking up a position with the ESRI in 1990 as research professor and director of the institute’s banking research centre.

In 1997 he returned to working for the World Bank, where his role included travelling around the world advising foreign governments on their economic policies.

He is extremely well travelled, and may have visited up to 100 countries. The World Bank role was a highly political one, according to one source, as it included advising senior political figures as to mistakes they might be making in economic policy.

Prof Honohan’s work for the World Bank involved studies of access to finance in developing countries, and his list of publications includes work such as Finance for Urban China and Making Finance Work for Africa.

The appointment of an academic to the position of governor of the Central Bank is a first for Ireland, though it is normal in other European jurisdictions.

“I think this is a good appointment from a European point of view,” Prof Philip Lane of the Trinity economics department said yesterday.

He said his former colleague, who will now become a member of the European Central Bank, will bring skill, experience and knowledge to the role, and will contribute to Ireland’s reputation.

From a more local point of view, he said, Prof Honohan’s deep understanding of the Irish economy and involvement in both research and policy implementation would be of advantage to his work with the Central Bank.

He said Prof Honohan was “universally popular in the economics community and has a very engaging personality. He has no airs or graces, and no arrogance.”

Within the ECB it is expected that Prof Honohan will be a “pragmatist” on the issue as to whether the bank should focus solely on preventing inflation or should see its role as involving a more interventionist role in combating recession.

He is married to Iseult Honohan, a senior lecturer in politics in UCD and author of Civic Responsibility (The Problems of Philosophy), (Routledge 2002). The couple have one son.

Prof Honohan is known for his enthusiasm for his work and for his sense of good cheer.

At the end of an address to an economics workshop in Trinity this year, which included a power point presentation, he finished with a photograph of a lamb bounding over a hill. A speech bubble from its mouth read: “Naa Maa!”