For the first time since Wim Duisenberg, the Netherlands is presenting its own candidate for the powerful six-man board of the European Central Bank (ECB). Will supervisory director Frank Elderson of De Nederlandsche Bank (DNB) take up the fight against the controversial cheap money policy?
For seventeen long years, the Netherlands had to do without a daily representative in Frankfurt. A period in which the ECB kept interest rates low and began to buy up trillions of government and corporate debt – to the annoyance of pensioners, savers, but also the House of Representatives and DNB. Now the Netherlands wants a bigger finger in the pie. If it were up to the government, Elderson will succeed the Luxembourger Yves Mersch at the end of this year.
The 50-year-old lawyer has been a board member of De Nederlandsche Bank since 2011. In that capacity, he is responsible, among other things, for banking supervision. “An excellent candidate,” Minister Wopke Hoekstra of Finance called him Friday morning in Berlin to European journalists. “He has a tremendous reputation for financial sustainability and digitalization, which are truly two topics of the 21st century.”
Frankfurter snake pit
Arnoud Boot, professor of financial markets at the University of Amsterdam and former chairman of the Bank Council of DNB, especially praises his communication skills. “When Frank sits down with six parties, you know they will reach an agreement. The way he knows how to resolve conflicts: that is his great strength. ”
Those diplomatic gifts could help Elderson, who is married to a Hispanic and has two grown children, in the Frankfurt snake pit. But will he be? Carsten Brzeski, ECB watcher at ING, considers him promising. “If only because the Netherlands has not had a representative on the board of the central bank for a long time.” Everything depends, according to Brzeski, on which rival candidates will appear next month. “The big countries within the eurozone – France, Germany, Spain and Italy – already have someone on the board right now. Only Eastern Europe is not represented. If they come with a strong woman or man, it will be exciting. ”
Green heart
If it were to be Elderson, he would end up at the center of financial and economic power in Europe. In response to the corona crisis, the ECB announced it would inject an additional EUR 1.350 billion into the economy. The main interest rate remains negative, and banks that turn to for financing will receive money. That cheap money policy is not expected to change with Elderson. Nevertheless, Brzeski speaks of an important position for the Netherlands. “The ECB Executive Board sets out the lines. He could certainly have an influence internally. ”
For example, where Elderson’s heart lies: climate change and the environment. With his characteristic, almost boyish enthusiasm, he has advocated far beyond the border for greening the financial sector in recent years. “We have to go from one and a half meters to a one and a half degrees of economy, as agreed in the Paris climate agreement,” he said in an interview with de Volkskrant this summer.
Elderson can find a powerful ally in ECB president Christine Lagarde, also known as “green”. Interesting detail: the same ECB is under fire from environmental organizations such as Greenpeace. By buying up debt from fossil companies such as ArcelorMittal, Shell and Schiphol in particular, the central bankers would subsidize polluters. Perhaps a challenge for Elderson. Because, as he himself formulated his motto in this newspaper: “Put your money where your mouth is.”
