|
 Asmussen announced on Sunday that he would be returning to Berlin
after just two years on the ECB's six-member executive board, to
become state secretary in the labor ministry.
Replacing him will entail some reshuffling of tasks on the board and
comes at a time when the ECB is reaching the limits of its
conventional monetary policy and may be forced to explore new ways
to keep deflationary risks at bay.
Little is known about Lautenschlaeger's views on monetary policy,
but she has a solid track record in banking supervision, having
worked at German financial supervisor Bafin before joining the
Bundesbank in 2011.
She has been among those who have warned about potential conflicts
of interest when the ECB has responsibility for both monetary policy
and banking supervision, and has argued against treating government
bonds as risk-free assets on banks' books.
The prime candidate to become the Executive Board's representative
at the new European banking watchdog, the Single Supervisory
Mechanism, Lautenschlaeger is seen serving as that body's
vice-chair. That would give her a prominent role as the ECB will
have the right to object to the SSM's proposed decisions.
Yves Mersch, Vitor Constancio and Peter Praet are also seen as in
the running for that job.
The most important and time-consuming part of Asmussen's job has
been taking care of the central bank's international relations. Most
likely candidates for that portfolio are Mersch and Benoit Coeure.
ECB President Mario Draghi will have the last word on who does what
on the board, which forms the nucleus of the policymaking Governing
Council.
Before Lautenschlaeger, 49, joins the bank, she will need to go
through the formal selection process. Now that she has been
officially nominated by the German government, European Union
finance ministers will consider all candidates for the post and make
their choice.
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The ECB will be asked for comment, as will the European Parliament,
which will conduct a public hearing with the contender in its
Economic and Monetary Affairs Committee before discussing it in a
parliamentary plenary session.
The parliament has no power to veto an appointment.
Finally, the Council of the European Union, at the level of heads of
government and heads of state, then formally appoints the candidate.
The fact that Lautenschlaeger is a woman will win her points with
the EU parliament, which held back the appointment of Yves Mersch to
the Executive Board last year on the grounds that not enough women
had been considered for the post.
In the 15-year history of the ECB, only two women, Finland's Sirkka
Hamalainen and Austria's Gertrude Tumpel-Gugerell, have served on
the board.
Traditionally, the four largest euro zone countries — Germany,
France, Italy and Spain — have had one seat each on the board,
although Spain has been without a representative since mid-2012,
when Jose Manuel Gonzalez-Paramo's term ended.
(Writing by Noah Barkin and Eva Taylor;
editing by Madeline Chambers and Catherine Evans)
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