Germany’s Buch seen as favorite to be new ECB top supervisor, sources say

Germany's Buch seen as favorite to be new ECB top supervisor, sources say
© Reuters. FILE PHOTO: The new German central bank (Bundesbank) vice-president Claudia Buch poses during a photocall at the Bundesbank headquarters in Frankfurt, May 20, 2014. REUTERS/Ralph Orlowski

By Balazs Koranyi

WASHINGTON (Reuters) -Three women are seen as the top contenders to become the European Central Bank’s new supervisory chief, with Germany’s Claudia Buch considered the clear favorite, conversations with a dozen sources with direct knowledge indicate.

The ECB oversees just over a hundred of the euro zone’s biggest banks and needs to pick a new top supervisor to replace Andrea Enria. His five-year term expires at the end of this year, just as sharply rising interest rates challenge banks’ business models.

Buch, the Bundesbank’s vice president, was mentioned by nearly all the sources as the outright favorite for the job, while most also mentioned Spain’s Margarita Delgado as a strong candidate and many also said Ireland’s Sharon Donnery could be in the running.

The sources, who all spoke on condition of anonymity, were unanimous that a woman must be picked to fight a gender imbalance at the institution. Twenty-four of its current 26 Governing Council members are men and the balance on the banking Supervisory Board is only marginally better.

The sources said the three women are fully qualified for the job on their own merits, so gender would be just one factor in the decision. None of the women have declared an intention to apply for the position.

An ECB spokesperson declined to comment.

Buch, a former member of the German Council of Economic Experts, is favored because she has the backing of Germany, the euro zone’s biggest economy and boasts a wealth of management experience in a large institution.

She has done limited work in supervision, a potential weakness, but has recently been elected to the Supervisory Board after a reshuffle atop the Bundesbank.

Delgado, the Spanish central bank’s deputy governor, is seen as a top-level supervisor with plenty of experience, but Spain already has the ECB’s vice presidency, an issue as the European Union tries to spread jobs around its members.

Donnery, a deputy governor at Ireland’s central bank, is seen as more of a long shot, the sources said. She was passed over for the job five years ago when Enria was picked and Irish officials already hold some key finance jobs.

At least one source said he would also like to see Stefan Ingves, the former governor of Sweden’s Riksbank, apply for the job.

The sources added that the selection process has yet to start, so all discussions about the candidates are still informal. A vacancy notice could come in the autumn, they said.

The new chair of the Supervisory Board is picked by the Governing Council and will be formally appointed by the European Union Council following the approval of the European Parliament.

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