ECB's board revamp exposes failings that could affect policy

Euro zone officials have embarked on a two-year process to replace most of the European Central Bank's executive board, including President Christine Lagarde, raising questions along the way about how well the institution represents the people it serves.

- BALAZS KORANYI FRANCESCO CANEPA

European Central Bank President Christine Lagarde in Frankfurt in September.

(REUTERS)

In contrast to the US Federal Reserve, which gets a new leader next year and faces criticism from the Trump admin istration over interest rates, the ECB can be sure its independence will not be challenged in the reshuffle and policy will not be questioned.

Yet, the same EU institutional complexities that shield the ECB from politics in deciding policy, have also left it trailing the already-weak diversity record of global central banking — a field dominated by white men from big Western economies.

The first chance to address some of the disparities comes early next year when the term of ECB Vice President Luis de Guindos of Spain expires.

The lack of geographic, gender and ethnic diversity, critics argue, leaves the bank with blind spots on the economy of a 20-nation bloc of 350 million people. Policymakers may lack the full picture on how households really experience hardships, inflation and interest rates.

The bank's lack of diversity is glaring. On its 26-member rate-setting Governing Council, there are 24 men. All the 20 national central bank governors that sit on this council, selected in national capitals, are men.

Meanwhile the six-person board, picked through the EU, has been dominated by men from the big four euro zone members — France, Germany, Italy and Spain. Former communist countries in the east, making up a third of the bloc, have never held a seat.