Tussle for ECBs Last Big Job for Years Becomes Two-Man Race

The race to clinch the European Central Banks final vacancy on its Executive Board for half a decade has just two contenders, both of them male.

Both candidates -- Dutch central bank official Frank Elderson and former Slovenian Governor Bostjan Jazbec -- have expertise in financial supervision, befitting the likelihood that the position will bring with it the role of second-in-command at the euro zones watchdog for lenders.

ECB Musical Chairs

Another Executive Board seat wont become available in years

Source: European Central Bank

The two of them will now vie for the role of replacing Yves Mersch, whose term at the ECB, along with his stint as vice chair of the Single Supervisory Mechanism, ends in mid-December. Euro-area finance ministers will make the selection in coming weeks.

With all four of Europe‘s biggest economies represented on the six-person board, the vacancy created by Mersch’s departure offered a rare opportunity for a smaller country to clinch the job for one of its own.

Frank Elderson

Source: Nederlansche Bank NV

Elderson would be the second Dutch official to reach that level at the ECB, after a lengthy absence for the country since President Wim Duisenberg left the institution in 2003. Jazbec would be not only the first Slovenian board member, but also the first from eastern Europe. Whoever gets it will fill the final such vacancy currently scheduled until 2026.

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The race to replace Mersch had offered a unique opportunity to achieve gender balance on the Executive Board, if only a third woman could be appointed. Elderson‘s nomination effectively canceled the possibility that his fellow citizen, former Dutch central bank official Joanne Kellermann, would be her country’s choice.

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The lack of a female candidate may prove contentious in the European Parliament, which has a role in ratifying the decision, and held up Merschs original appointment for months.

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‘Unacceptable’

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“Governments continue to perpetuate this unacceptable situation when they insist in defying the parliaments wish for gender balance shortlists,” Luis Garicano, a lawmaker in the legislature, said in a press release on Thursday from the centrist Renew Europe group.

Garicano serves on the Committee on Economic and Monetary Affairs, which will scrutinize whichever man the finance ministers pick.

Of the two candidates, Elderson, 50, can bring direct knowledge of euro-region supervision from his role as the Dutch member of the board of the ECBs bank watchdog.

He is also chairman of the Network of Central Banks and Supervisors for Greening the Financial System, a group of 66 mostly European institutions aiming to address climate change, expertise that could be an advantage too. ECB President Christine Lagarde has long argued that combating climate change should be “mission critical” for policy makers.

“Frank Elderson has extensive central-banking experience,” said Dirk Schoenmaker, banking and finance professor at Erasmus University Rotterdam. “With the departure of Yves Mersch, this is basically a Benelux chair” to fill.

Bostjan Jazbec

Photographer: Chris Ratcliffe/Bloomberg

Yet Jazbec, who is the same age as Elderson, has a strong resume too -- one that includes serving on the ECB‘s Governing Council when he led Slovenia’s central bank for almost six years.

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That role brought him first-hand experience of a banking crisis. Jazbec stepped down early as governor amid national controversy over a decision to wipe out investors in a 3.2 billion-euro ($3.8 billion) rescue of lenders. He currently sits on the board of the Single Resolution Mechanism, the European Unions institution for winding down failing banks.

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Euro-area finance chiefs will aim to select a candidate at their meeting on Oct. 5.

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— With assistance by Ruben Munsterman, and Alexander Weber