The board of directors of the Bank for International Settlements (BIS, for its acronym in English) this Thursday elected the Governor of the Bank of France, François Villeroy de Galhau, as its new president, replacing the new German Jens Weidmann. left his post as head of the Bundesbank. His mandate begins with immediate effect and lasts for three years.
The appointment of Villeroy de Galhau (Strasbourg, 62 years) will further increase France’s share of power in major international organizations: he already has, among others, Christine Lagarde as head of the European Central Bank (ECB); with Laurence Boone as Chief Economist of the Organization for Economic Cooperation and Development (OECD, the think tank rich countries); and will soon also have Pierre-Olivier Gourinchas head of the strong International Monetary Fund (IMF) Studies Department, a position he appointed this week. Emmanuel Macron would thus be likely to sell voters far greater weight than his country in some of the most powerful economic organizations on the international scene ahead of April elections.
Villeroy de Galhau is an old acquaintance in the European economic arena. Seen the head of the French central bank since September 2015, when proposed for the position by the then president of the Republic, socialist François Hollandewas only re-elected three months ago by the centrist Macron for a second six-year term. His landing at the Bank of France was not without controversy, after nearly 150 economists rejected his appointment because of his past as a number two from BNP Paribas, the largest financial institution in the euro area by assets. His main competitor in that career was, paradoxically, Benoît Coeuré, hitherto director of the BIS innovation center and who has just been elected as the new president of the French Competition Authority.
However, over the years, Villeroy de Galhau has built a better image for himself in the financial and academic world. In 2019, in fact, his name is already sounding strong to replace Mario Draghi – today the Prime Minister of Italy – at the head of the ECB, a career in which his compatriot Lagarde ultimately won despite his extraordinary political profile and his experience in Monetary politics, credentials the president holds. new BIS. Graduated from the School of National Administration, the academic cradle of the French political and economic elite, before coming to BNP Paribas and the central bank he passed the Ministry of Finance, he was chief advisor on European affairs to the Minister of Finance and later Socialist Prime Minister Pierre Bérégovoy, served as chief of staff of the two are also holders of Socialist Economics – Dominique Strauss-Kahn and Christian Sautter – and are director general of Tribute in the Lionel Jospin Government.
Without being far from heterodox, the ideological approach of the French central banker is a change from his predecessor in the central bank coordinator, Weidmann, one of the leaders of ordoliberalism, the de facto leader Hawk Europe lately and a staunch defender of monetary orthodoxy on the governing council of the ECB in it’s Draghiwith whom he collided on several occasions. Villeroy de Galhau has always appeared for Italy.
France’s attribution to the BIS, which he will make in keeping with his position at the head of the eurozone’s second most important issuing agency – after the Bundesbank -, through leading the “strategic and political direction” of the Basel (Switzerland)-based body, the management of which is the responsibility of the board directors. Most of the executive functions and day-to-day operations will continue to be in the hands of the CEO, Agustín Carstens of Mexico, who recently renewed his mandate. The BIS’ highest governing body has 18 members, 12 of which are rotating and the remaining six – the heads of the central banks of the United States, Britain, Germany, France, Italy and Belgium – are permanent.
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