Rehn Proposed as Bank of Finland Governor by Finnish Lawmakers

(Bloomberg) -- Olli Rehn took another step on a path to succeed Erkki Liikanen as governor of Finland’s central bank.

The parliamentary supervisory council, which oversees the Bank of Finland, unanimously agreed to put Rehn’s name forward, according to a press release on Friday. The government will next review the proposal before deciding on whom to recommend for the job. Ultimately, the appointment is made by President Sauli Niinisto.

When it comes to monetary policy, Rehn may be a dark horse.

“There was almost no public discussion on the merits of different monetary policy schools of thought and policy decisions facing the European Central Bank now and in the future,” said Juhana Brotherus, chief economist at housing-credit institution Hypo in Helsinki. “It’s difficult to tell what kind of role Governor Rehn will play as his monetary policy views are not well known.”

The Bank of Finland governor sits at the ECB’s round table in Frankfurt, where monetary policy decisions are made for the 19 euro nations. Liikanen steps down on July 12 after serving two seven-year terms, having helped shape the ECB’s response to the European debt crisis.

Read more on how Olli Rehn emerged as the top candidate

Rehn, a 56-year-old seasoned negotiator who was earlier this year promoted to the post of deputy governor, has long been considered a top candidate after a career at the European Commission. He was selected from among ten candidates, all male, after no women sought the top job.

“The decision was widely expected and has been some kind of public secret in Finland for a while,” Brotherus said. “Most probably, he will continue in the same role as Liikanen and back President Mario Draghi in the governing council.”

Heidi Schauman, Aktia Bank’s chief economist in Helsinki, agrees.

“Given that Liikanen has made himself known as a consensus builder in the ECB, I expect that Rehn will try to build on that tradition,” Schauman said. “Around Europe Rehn is known as a strong voice in the austerity debate, so in that sense it would be natural for him to also on the monetary policy side build on the tradition of taking a longer and sustainable view.”

To contact the reporter on this story: Raine Tiessalo in Helsinki at rtiessalo@bloomberg.net.

To contact the editors responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net, Jonas Bergman at jbergman@bloomberg.net, Kati Pohjanpalo

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