Former Goldman Sachs Managing Director Appointed European Central Bank President!

Mario Draghi (Wikipedia):

Draghi was then vice chairman and managing director of Goldman Sachs International and a member of the firm-wide management committee (2002–2005). A controversy existed on his duties while employed at Goldman Sachs. Pascal Canfin (MEP) asserted Draghi was involved in swaps for European governments, namely Greece, trying to disguise their countries’ economic status.

What could possibly go wrong?

Mario Draghi appointed European Central Bank president (Telegraph, June 24, 2011):

In draft conclusions agreed at a summit in Brussels, EU leaders “appointed Mr Mario Draghi president of the European Central Bank from November 1, 2011, to October 31, 2019.”

The 63-year-old economist and banker will replace France’s Jean-Claude Trichet, who steps down at the end of October after eight years in the eurozone’s top monetary policy post.

French officials had expressed concern in recent weeks about Draghi’s appointment as it would have meant two Italians being on the ECB’s six-member executive board with no French representation. The other Italian, Lorenzo Bini Smaghi, is not due to leave his eight-year post until May 2013.

In April, Italian Prime Minister Silvio Berlusconi promised French President Nicolas Sarkozy that Italy would yield Bini Smaghi’s place on the board to a French candidate in return for France’s backing of Draghi for president.

But that proved problematic, with Bini Smaghi saying he had absolutely no intention of stepping down early.

EU sources said that Bini Smaghi had assured EU Council President Herman Van Rompuy and Sarkozy in discussions on Friday that he would relinquish his post in the coming weeks.

“We expect an announcement shortly,” one senior EU source said. Another said: “This morning, in the Council, Van Rompuy and the Italians will explain that Bini Smaghi will leave in due time.”

It is not clear what job Bini Smaghi will move to, but it had been expected that he would become head of the Italian central bank or a similar high-level financial post.

Bini Smaghi was not immediately reachable for comment.

Sources in Frankfurt said the ECB was expected to issue a statement later on Friday.

While Draghi, a highly respected economist and banker, has won widespread backing for his candidacy in recent months, there were concerns earlier in the process that his nationality and past employment with Goldman Sachs could hinder his pathway to Europe’s top central banking job.

In appearances before the European Parliament’s finance committee, Draghi has made clear that his role at Goldman Sachs between 2002 and 2005 did not involve selling financial instruments but was largely an advisory position.

He has also underlined his experience in overseeing Europe’s Financial Stability Board, and emphasised the common thinking he shares with Trichet on monetary policy and on the risks to the financial system of a failure to tackle Greece’s debt crisis

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.