The European Central Bank on Wednesday nominated Daniele Nouy to be the first head of the eurozone’s supervisory mechanism, The New York Times reports.
Nouy is certainly more than qualified for the post. She has spent most of her career at the French national bank, where she has held the post of Prudential Supervision and Regulation Authority. In addition, she has served on the Basel Committee, which helped create international standards that govern banking regulation. The Times reports that Nouy has experience both on a national and an international level to hold the post, as well as a background that will make her empathetic to the needs of the region’s individual banks while not losing sight of the importance of international authority.
The supervisory mechanism is set to begin near the end of 2014. The mechanism will provide a level of oversight for the eurozone’s banks, which many are concerned are still struggling in the wake of the financial crisis. With countries like Spain, Portugal, and Ireland requiring bailouts due to banking woes, it is certainly understandable that a level of supervision could play a role in preventing future catastrophes.
First, though, the ECB must complete a series of measures designed to assess the state banks’ balance sheets are in. These measures will include stress tests, which simulate best- and worst-case scenarios, as well as an asset quality review, in which various levels of risk of banks’ assets will be checked and verified. The measures are expected to take most of 2014, which is why Nouy is set to assume her post at the end of next year.
One of the strongest parts of Nouy’s candidacy may actually have been her gender, according to The New York Times. The European Central Bank currently lacks a top executive who is a woman, something that the body has drawn fire for in the past. By appointing a woman to head up the bank’s biggest new initiative, the bank is hoping to dispel rumors of sexism that some have floated as a possible reason for the lack of female representation among the bank’s top ranks.
Nouy’s candidacy must pass some trials before it is secured. Her position will have to be put for a vote before the European Parliament, where various officials will be able to voice their opinions on her appointment. Many analysts think that she will not face much opposition, especially since France and Germany, usually the most vocal opponents of unified banking measures, seem to see eye-to-eye on the policies that Nouy would enforce.