December 2010: Patrick Honohan, Governor, Central Bank

Outspoken and respected, this public official has shown leadership.

We’re talking about a very substantial loan for sure – tens of billions, yes.” Patrick Honohan, Governor of the Central Bank, speaking on Morning Ireland on Thursday, November 18th, confirming what everyone suspected – that Ireland was about to agree to a large EU/IMF loan.

He continued, “the ECB would not send large teams if they didn’t believe first of all that they could agree to a package, that there is a programme that is fully acceptable to them that could be designed, and that it is likely to be acceptable to the Irish Government and the Irish people.”

In a week where Government Ministers were calling talk of a deal “fiction”, Honohan’s frank assessment of Ireland’s situation was refreshing and a necessary antidote to the Government position.

Leadership

Showing leadership in what was a momentous week in Irish history, Honohan was the first public official to admit what had become ever more obvious, that the EU/IMF officials were in Dublin to negotiate a large loan to fund the banking sector and the public expenditure.

In the interview he confirmed, “it’ll be a large loan because the purpose of the amount to be advanced or to be made available to be borrowed, is to show that Ireland has sufficient firepower to deal with any concerns of the market. That’s the purpose of it.”

Outspoken

Since taking over as Central Bank Governor on September 26th, 2009, Honohan has been an outspoken and respected figure in the marketplace. In August, Honohan spoke of the importance of confidence in Ireland’s finances, saying, “the sooner the markets are convinced, the sooner the interest spreads will shrink to the benefit of all.”

His views throughout 2010 on issues such as corporation tax and Ireland’s fiscal position have been received with respect from the markets both at home and abroad.

History

Honohan is the 10th Governor of the Central Bank of Ireland and was appointed on September 26th, 2009. Before his appointment as Governor, he was Professor of International Financial Economics and Development at Trinity College Dublin, from 2007. Prior to this, he spent almost a decade at the World Bank, where he was senior advisor on financial sector policy.

He was previously Research Professor with the Economic and Social Research Institute, Dublin from 1990 to 1998. He was economic advisor to the then Taoiseach, Garret Fitzgerald, from 1981 to 1982 and again from 1984 to 1986.

In his career in the Irish public service and at the ESRI, he contributed policy advice directly and indirectly to successive Irish governments.

During his time at the World Bank, his work entailed the provision of policy advice to central banks and governments around the world and he also played a key role in the design and implementation of the IMF World Bank Financial Sector Assessment Programme, as applied to developing countries from its initiation in 1999.

ECB

In his capacity as Governor, Honohan is a member of the ECB Governing Council, which formulates monetary policy for the 16 countries of the euro area, including decisions relating to monetary objectives, key interest rates, the supply of reserves in the Eurosystem and the establishment of guidelines for the implementation of those decisions.