Finance The ECB decides this week whether to support Margarita Delgado to lead its Supervisory Board

The European Central Bank (ECB) will meet next Wednesday to finally decide which candidate it supports to succeed Andrea Enria as head of the organization’s Supervisory Board: the Spanish Margarita Delgado, current deputy governor of the Bank of Spain, or the German Claudia Buch, vice president of the Bundesbank.

The body in charge of making the decision is the Governing Council of the ECB, which brings together the six members of the Executive of the monetary authority and the presidents and governors of the other 19 central banks of the euro zone.

Although the appointment of the ECB has almost total weight, the decision is not up to the body. The candidate chosen by the ECB will have to submit to the approval of the European Parliament, and later, to the Council of the European Union, which would ultimately be in charge of endorsing Enria’s future replacement.

The European Parliament itself places Delgado as its favorite, after a preliminary hearing that took place behind closed doors in July, according to Europa Press.

Delgado’s candidacy has always been seen as one of the strongest, although the specialized press pointed out that it could end up playing against him that currently several senior EU financial positions are in the hands of Spaniards. Apart from the vice-presidency of the ECB carried out by Luis de Guindos, other Spaniards hold high positions in this environment, such as the cases of José Manuel Campa, who chairs the European Banking Authority (EBA); the governor of the Bank of Spain, Pablo Hernández de Cos, also president of the Basel Committee, and Fernando Restoy, who leads the Financial Stability Institute (FSI) of the Bank for International Settlements (BIS).

The traditional informal and unwritten balance maintained by senior officials in Spain, Italy, Germany and France would thus be affected, pending who runs as a candidate to succeed both Guindos, when his mandate expires in 2026, and Christine Lagarde. , president of the ECB, in 2027.

However, to the Spaniard’s credit, she is considered to have a better understanding of the internal workings of the ECB, having helped establish its supervisory arm and served as deputy director general.

Before that, Delgado was a key official at the Bank of Spain dealing with the country’s banking crisis, and as deputy governor she deals with a wide range of issues, including financial stability.

For her part, Buch is an economist rather than a regulator, but she has taken aggressive stances when it comes to forcing banks to accumulate capital to prepare for economic downturns. In early 2023, she joined the ECB’s Supervisory Board, which meets every three weeks to discuss, plan and carry out supervision.

In addition, the decision on the future president of the ECB Supervisory Board is also intertwined with the decision of the future president of the European Investment Bank (EIB), a position disputed by the current first vice president, Nadia Calviño, together with the hitherto Executive Vice President of the European Commission responsible for Competition, the Danish liberal Margrethe Vestager, and three other candidates from Italy, Sweden and Poland.

Due to the balance between countries, it would be highly unlikely that both Delgado and Calviño would be nominated for both positions. However, the final decision on the EIB presidency will not be known until the ECB decides on its candidate.

Spain, which this semester holds the rotating presidency of the EU, plans to include in the agenda of the informal meeting of Ministers of Economy and Finance (Ecofin) on September 15 and 16 in Santiago de Compostela the discussion and vote on the candidates for preside over the EIB, although the final decision corresponds to the Bank’s Council of Governors, which is made up of the same ministers, expected in October.

The Supervisory Board of the ECB is composed of the President, the Vice-President, four representatives of the ECB and representatives of the national supervisors involved in European banking supervision, formally known as the Single Supervisory Mechanism (SSM).