Italian central banker and former Goldman Sachs employe, Mario Draghi, has won the backing of EU leaders to become the next president of the European Central Bank (ECB) from the November. Draghi entered the spotlight when it became clear that Goldman Sachs was swapping Greek debt to cover up the economic disaster.
“The deals were undertaken before my joining Goldman Sachs and I had nothing to do with them.”
“We are all confident that Mr Draghi will exercise strong and independent leadership of the ECB, continuing the tradition started by the banks first two presidents,” European Council President Herman Van Rompuy told journalists after the meeting.
Adding: “This is essential in normal times and indispensable in difficult times.”
A potential hurdle to Draghi’s smooth takeover from current ECB President Jean-Claude Trichet was removed earlier in the day, amid French concerns of a loss of influence on the bank’s executive board.
With Trichet stepping down, France will be without a member on the six-person panel, while Italy will have two in the form of Draghi and Lorenzo Bini Smaghi.
An implied French threat to block Draghi’s takeover was averted however when Smaghi signaled he would step down before the end of his full term expired.
“I spoke to Mr Smaghi this morning by phone and he did tell me personally that he would not see his mandate as a member of the governing board through to its end,” Van Rompuy says.
“It’s up to Mr Smaghi to decide what timetable he may have.”
Right Man at the Right Place at the Right Time
Born in Rome, Draghi graduated from La Sapienza University of Rome under the supervision of Federico Caffè, then earned a Ph.D in economics from the Massachusetts Institute of Technology in 1976 under the supervision of Nobel Laureates Franco Modigliani and Robert Solow.
From 1984 to 1990 he was Executive Director of the World Bank.
In 1991, he became director general of the Italian Treasury, and held this office until 2001.
During his time at the Treasury, he chaired the committee that revised Italian corporate and financial legislation and drafted the law that governs Italian financial markets.
He is also a former board member of several banks and corporations (Eni, IRI, BNL and IMI).
Draghi was then vice chairman and managing director of Goldman Sachs International and a member of the firm-wide management committee between 2002–2005.
A controversy erupted on his duties while employed at Goldman Sachs.
Draghi responded that the deals were “undertaken before my joining Goldman Sachs and I had nothing to do with” them, in the 2011 European Parliament nomination hearings.
Wonder if this will bring back confidence to the financial markets?
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