Philip Lane named new Central Bank Governor

Many congratulations to Philip who has been named as the new Governor of the Central Bank.

I assume this means that his blogging activities will be curtailed, and so it seems appropriate that he be publicly thanked for setting up this blog, in December 2008. Whether it made a contribution to public debate during the crisis is for others to judge — I think it did. But it also gave a platform to many Irish academics who otherwise would not have had a public voice, by dramatically lowering the cost of engaging in public debate. It helped bring us out of our academic comfort zones and engage with issues outside our research specialisms. In my case blogging even led to a couple of serious research projects, using history to shed light on the present. Finally, the blog provided a model for other group blogs in Eurozone crisis countries.

So, many thanks Philip and best of luck in the new job.

Comments

comments

48 thoughts on “Philip Lane named new Central Bank Governor”

  1. Congratulations to Prof Lane on his elevation. His measured approach to all matters suggests that he will be a solid governor.

    This blog has been far and away the most enlightening online resource I have ever used. I think it is model for academics influencing and informing people outside of their institutions. It has certainly given me a far greater understanding of economics and how it can/does/should influence policy. I suspect that it has done the same for a lot of journalists. That has to be of benefit to our country.

    If the blog does wind up, which would be a pity, then I hope the archives are available into the future.

  2. This is great news. A real economist and not a civil servant again at the Central Bank.
    My personal thanks to Philip Lane and his colleagues for the Irish Economy site which has been a beacon of intelligent comment, analysis and reference to other papers during the crash and (partial) recovery.
    As someone who studied economics in Trinity over 40 years ago, it is a great facility to keep me up-to-date on economic developments.
    It is clear from evidence to the Banking Inquiry that more contrarian views and more open debate is needed at the Central Bank which Prof Lane may encourage given his record of facilitating the Irish Economy blog site.
    Every good wishes.

  3. Congratulations on your appointment Prof Lane, and thank you for your efforts on the blog.

    Also, if you wold like to use any of my blog posts as a basis for Irish Central Bank policy, no attribution is necessary.

  4. Congratulations Philip – it must be great for an academic to become a key policy maker at a still uncertain time at European level

    Credit too to Michael Noonan for not endorsing an insider.

    It would be good to pass control of the blog to someone with an enthusiasm for it. Interest varies depending on the cycle but you have provided a platform for an input from us outsiders which may sometimes bring a real world perspective to issues.

  5. Feels like one of our own got the job! Fantastic news and hoping Philip bequeathes this outstanding blog to someone else! Any volunteers? 🙂

  6. I join with many of the comments above and extend my congratulations on the appointment which is also of considerable importance in terms of reflecting changing attitudes to governance issues and structures.

  7. Molaim.
    Thanks for setting up this blog and the many other public events you organised in TCD eg. lectures/seminars open to the public.

  8. I find it very surprising that the govt would not appoint a battle hardened manager with experience of running a large complex organisation to this pivotal & highly political job.

  9. Congrats. I don’t feel as slighted now when I asked Phillip a couple of weeks back to explain the ECB feel the need to regularly publish Target 2 balances if we really believe the Euro is a single currency that is not for backing out of.

    I think the question is still valid but perhaps he was wiser to offer no view 🙂

  10. Congratulations! I assume you’ll be mining the wonderful, always coherent and logically solid opinion /comments of Irish economy before you decide on any major issues. Let me start by saying I hope the LTV and LTI mortgage rules will remain in place. It seems like plenty of the media and political establishment would love to resolve a housing supply issue with credit. My fear was that Noonan would appoint based on who was most likely to unwind them.

  11. @Philip Lane

    Tear into the challenge. Get critical.

    p.s. Blind Biddy appreciates the expression of interest in a possible seat on a certain board. Would certainly add some colour …

  12. Very good appointment. Hopefully it will lift the mood of abject despair among the masses that has prevailed since Black Sunday when, within the space of a few hours, Ireland exited the Rugby World Cup and Daniel O’Donnell exited Strictly Come Dancing.

    I hope the new Governor will revise the severe restrictions on mortgage lending. These are not justified at present. Its possible that they could be justified at a later date. But, right now the construction industry is still close to the bottom of the cycle and there is a growing shortage of new houses. With inflation at zero, these are more urgent problems than the prospect of the economy overheating.

  13. Congratulations and best of luck!

    Perhaps there might even be a housewarming champagne reception in the Central Bank, with an invite for all the professional and amateur contributors on the blog! (one can always imagine!)

  14. Many thanks Philip for your efforts in keeping this board going, congratulations, and don’t forget to bring your gumshield 🙂

  15. Probably too late to ask Philip what he thinks we should do when the looming prospect of an Irish and EU speed inflation phenonenon kicks in over the next 6 to 12 months and we remain part of a dysfunctional Euro club.

    Of course his hands will be largely tied from a policy perspective – but his voice will count for something.

  16. Sporthog says…..

    Philip Lane….. a T.K. Whitaker Mark II?

    Lets hope so!!!

    Congratulations and well done… richly deserved indeed.

  17. Congrats Philip – hopefully some of the odd capital requirement rules in respect of bottom of the cycle (I mean rock bottom cycle) financials can now be reviewed. And on the other side the artificial adherence to accounting rules as a means to prevent the actual recognition of property losses can be amended to reflect the real world – these two issue sorted would be a major step in the right direction. Best of luck.

  18. Great choice. Good to again have someone for whom macroeconomics and keeping the financial system in line are likely to always come ahead of political convenience and an easy buck.

  19. @grumpy,

    Either a lot of people, or a number of people with a lot of money, laid money on the basis that the status quo ante Governor Honohan would be restored – i.e., the elevation and transation of the top Finance (or PE & R) civil servant. This piece from the Indo:
    http://www.independent.ie/business/ministers-howlin-and-noonan-in-row-over-appointment-of-new-central-bank-governor-34127332.html

    suggests that they might have been right. It appears that the MoF might have being going along in that direction, but then changed his mind. Interesting.

  20. Philip Lane

    Congratulations and best of wishes in your new post. I hope everything goes well for you.

    @Tull

    There were, no doubt, many ‘battle hardened managers’ in the Central Bank up to 2008. The tragedy for people afflicted by battle hardened managers is that too often the administrative and organizational matters take precedence over understanding and direction.
    The pre-2009 Central Bank data was apparently almost jumping off the page and hitting its purveyors on the nose, but it still went largely unseen.

  21. @ PH

    Without wishing to enter in any way into the merits of individual candidates for the post, one could hazard a guess that the explanation lies in this extract, second sentence, from the press statement by the MOF.

    “I would like to congratulate Professor Lane on his nomination to this prestigious national and European position. Professor Lane’s outstanding economic, financial and policy making record ideally position him to lead the Central Bank in the coming years. Also, his appointment by ECB President Draghi to chair the Advisory Scientific Committee of the European Systemic Risk Board demonstrate the standing he is held in at European level.”

    The Minister for Public Servants missed a good opportunity, as the French say, to stay silent on what transpired at cabinet.

  22. Philip will be participating in an interesting General Council meeting in December judging by Draghi’s comments yesterday. The ECB had expected inflation to pick up in 2016 and beyond, partly predicated on higher oil prices and an FX rate of $1.10 and so the recent fall in the former and rally in the latter has cast doubt on that expectation. The updated inflation forecast in December is likely to prompt further ECB easing, with a cut in the deposit rate (currently -0.2%) and an expansion of the QE programme on the cards.
    The impact of QE on inflation is debated and many think it has diminishing returns. The political implications of QE may also be more more widely discussed as it has implications for income distribution.

  23. @DOCM

    The Rabobank spokesperson that described the new events in Portugal is a “political shock”, shows just how far removed the banking and financial community are from the lives of ordinary people.
    There seems to be little recognition amongst bankers that ordinary people sorely affected by the crisis will not accept their straightened circumstances is silence, particularly when the beneficiaries of those straightened circumstances seem to believe that the maintenance of the unreal economy of which they are part, as distinct from the real (sic) economy, must take precedence over all else in policy formulation.

    Good link, all the same, and an interesting political developement.

    I also note the Deutsche bank seems to want to sell off a major asset management/ insurance division; possibly becasue the new capital requirements would more than stretch the limits of its capabilities. The European banking crisis is not nearly over.

  24. @ JR

    The message I took from the utterances by our coalition political leaders is that they display a level of insular mediocrity which, although no surprise, should be a major cause for concern. Who knows what the next election will bring!

    As to AEP, he has been predicting the demise of the EU, and the euro in particular, for decades. Both are big beasts and I do not see either disappearing from the jungle any time soon.

    https://www.ecb.europa.eu/paym/t2/html/index.en.html

  25. Dan,
    Is there any evidence that QE in the EZ has led to income or wealth inequality.
    In addition, is there any evidence that income or wealth distribution has greatly changed in this country since the the peak of the last cycle.

    JR,
    I note again that Prof Lane does not have a track record in managing a large institution. Moreover, I don’t know where he stands on many of the issues that confront the ECB. I also have no idea how good a communicator he is.
    In less than 6 months, he will be excoriated by about 90% of the contributors to this blog when it turns out that the govt have appointed an insider.

  26. And our new Central Bank governor wakes up on a Sunday morning to discover that homelessness in Dublin is his fault.

    http://www.independent.ie/business/personal-finance/property-mortgages/central-bank-has-wrecked-house-market-for-all-buyers-34138559.html

    There must be an election on the way. I could just reprint my commentary from almost exactly a year ago. https://hughsheehy.wordpress.com/2014/11/18/same-old-housing-bubble-same-old-hypocrisy/

    Or other commentary even from 10 years ago.

    When will we ever learn?

  27. @Tull.
    If the Central Bank printed money and gave it to anyone with an income below €30k, say, it would be seen as having a distribution effect, but so has buying assets as not everyone owns assets. Conventional monetary policy has distribution effects too- zero rates hit savers and benefits borrowers, Again, low income households may not be able to borrow. The overall macro impacts may not be that large, however, and the impact of taxes and transfers may be much higher.

  28. One aspect that hasn’t been considered much is the effect on Trinity College itself. Philip Lane is one of its few world-class academics. In recent years TCD has been falling in the rankings faster than Aston Villa have been falling in the Premiership. Now he’s going its like they’re losing their star player. This will only exacerbate the downward trend in the rankings. You only have to follow Twitter to realise that there are quite a few low-calibre ultra-left-wing academics at Trinity , who spend much more time tweeting anti-Catholic bigotry than doing quality research. The Government should consider bringing in an internationally-renowed university with Irish links to run it. Notre Dame would be a good choice.

  29. @DOCM

    On the role of central banks, this report is certainly one for the archives.

    http://www.independent.ie/irish-news/politics/enda-kenny-we-were-days-away-from-dispatching-army-to-prevent-bank-run-34131083.html

    It is now clear beyond dispute that Enda Kenny fabricated the entire incident with Patrick Honahan. It was a fabricationdesigned to destroy the reputation of FF. Fake or not, I’m sure the cultural site will soon me making a film or a play out of it. It reminds me of the fake tweet RTE put out during the last Presidential election. In his defence, Enda Kenny may simply have got confused. Having read so many predictions from Morgan Kelly that such an incident was inevitable, he probably became unable to distinguish predictions from reality.

  30. JtO,

    I do enjoy your musings from time to time (though you are recently a bit guilty of what you accused others of, rightly maybe: repetition).

    The shining stars in TCD are the very well represented (even dominated by) the scientists, engineers and mathematicians. They are still doing pretty well.
    When it comes to the ´dismal science’, maybe Honohan will return to Trinity whence he came before the Central Bank appointment.
    Anyway there is no shortage of applications from outstanding candidates from around the world. Don´t worry about TCD (even if some of it´s adminictrators go mad occasionally and call everyone a ‘professor’ much to the annoyance of the actual professors and people who don’t like misrepresentation; even the head of the college gave himself the title ‘president’ aswell as Provost- a bit North Korean. He was also was taken in by marketing people with nonsense about changing the coat of arms. At least the term of office is limited and what he did can be reversed, and provide an amusing footnote in a history of TCD written many years in the future.

    Sadly for you, perhaps, the Government cannot “consider bringing in an internationally-renowed university with Irish links to run it” because the Government does not own Trinity. Of course there is a successful arrangement between the college and the government, but the college of Tone, Davis, Emmet, Burke, Berkeley and Swift* is not owned by the Government.

    *Not mention, also the college of Hamilton, E. T. Whittaker, Walton, G F FitzGerald, G J Stoney, J MacCullagh, T Preston, J Joly, F T Trouton, J L Synge, J M Synge, C A Parsons, G Foster, D Bradley, R Maunsell, Goldsmith, Hincks, Wilde, Beckett, Dionysius Lardner, Bram Stoker, Grattan, Ingram, F Y Edgeworth and E Dowden, to mention a few….

  31. @peadar Colman

    You are sounding a little like a supporter of Aston Villa. Basking in past glories while your team slips down the league. TCD (and UCD) have been sliding down the global league table in recent years, which fact appears to be not unrelated to their increasing domination by academics of an extreme left-liberal bent. Philip Lane’s departure won ‘t help. What odds on his replacement being from the right of the political spectrum?

  32. @ JtO,

    Thanks for explaining the Aston Villa reference – I don’t follow garrison games myself, but amusing that you do.

    Those ‘academic’ league tables are nonsense for a number of reasons. TCD will have increased in some of them recently because Campbell, a graduate from Donegal, just won a Nobel prize. Yet most people concerned will not have heard of him, but somehow get reflected glory (if one accepted those nonsense lists) because he did his undergraduate degree there decades ago.

    But the point of my last post was to tell you that: ‘the Government cannot “consider bringing in an internationally-renowned university with Irish links to run it” because the Government does not own Trinity.’

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