ECB Seat to Be Filled in Open Contest If Latvian Leader Prevails

(Bloomberg) -- The next member of the European Central Bank’s Governing Council from Latvia will be selected through an open competition if Latvian Prime Minister Krisjanis Karins gets his way.

The premier is looking for a clean break for the monetary authority, which was tainted by a bribery scandal during the current governor’s 18 years at the helm, he said in an interview last week. Karins is looking to rally support in parliament to amend the central bank law, his office said Thursday in response to emailed questions. Currently, the governor is chosen through a majority vote from candidates nominated by at least 10 lawmakers.

ECB Seat to Be Filled in Open Contest If Latvian Leader Prevails

An open contest would help put a professional in charge of the central bank, said Karins, whose government commands enough votes to push it through parliament. The central bank has had only two governors since 1991. Other nations also have an open contest to pick their central bank chiefs, including Bank of England.

Governor Ilmars Rimsevics, whose term expires in December, has been at the center of the allegations that rocked the banking industry and is facing a trial over charges including bribery. He denies all charges.

Karins favors holding “a wide competition to get good applicants to apply and then choose the most appropriate,” he said in an interview in New York, without naming a specific candidate. “We of course need someone with banking experience, and there are plenty of people with banking experience. We also need someone who has vision and leadership qualifications and proven abilities as well.”

Latvia is already holding an open contest for its bank regulator chief after parliament changed the law earlier this year. Karins hasn’t publicly criticized the central bank governor or the director of the bank regulator. His government has tightened rules on bank oversight and given the regulator a mandate to fight money laundering in an effort to repair the financial industry’s reputation after U.S. allegations of money laundering led to closure of the third-biggest bank.

©2019 Bloomberg L.P.

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