Friday, June 27, 2008
The Oesterreichische Nationalbank (OeNB) has elected a new interimistic governor who will participate in the meetings of the European Central Bank (ECB) from September 1. The 64 years old Professor Ewald Nowotny will follow the present governor Klaus Liebscher - one of the hawks in the ECB's governing council - who is going to retire by August 31.
Nowotny, a declared social democrat, can look back on a long academic and banking career that began in 1971 at the Austrian Postal Savings Bank (Oesterreichische Postsparkasse). From 1999 to 2003 he served as vice president of the European Investment Bank. From 2006 to 2007 he cleaned up the mess at Austrian Bawag bank where his predecessors had gambled away some €1.73 million in deals with the son of former Bawag CEO Walter Floettl, Wolfgang, who is remarried to a niece of former president Eisenhower.
Walter Floettl will be aquitted - or prosecuted - in the coming days for his casino-like gambling with Yen carry trades that brought down Bawag which was aquired by US hedge fund Cerberus last year.
Cerberus official plan is to IPO the bank as soon as possible. In the current banking climate it is likely that Cerberus will have to keep Bawag as a long term investment.
Like Fed chairman Ben Bernanke Nowotny has a long academic career with stops at Harvard and the Technion university in Haifa, Israel.
Nowotny has so far not commented on the monetary policy of the ECB. The interimistic governor will take part in the council meeting on September 4 for the first time.
Due to the mess in Austrian politics the length of his term will highly depend on the result of the next Austrian parliamentary elections which may take place this year already because of unsolvable problems in the ruling coalition of conservatives and social democrats.