Who better than a Frenchman to criticise the Gallic way? European Central Bank policymaker Benoit Coeure said on September 18 that the euro zone's second-biggest economy was behind the times when it came to nominations to big public institutions and that the process should be more transparent. True, he himself missed out on heading the country's central bank. But his critique is spot on.
President François Hollande passed Coeure over by nominating ex-BNP Paribas banker François Villeroy de Galhau to run the Bank of France. Granted, Villeroy de Galhau is well qualified and has a couple of decades of public sector experience. But French voters are probably even less fond of bankers than their Anglo-Saxon counterparts.
And Coeure's complaint isn't just sour grapes. More than 100 economists criticised Hollande's pick in a letter on September 15. The governor of the French central bank has less clout than in France's pre-euro days, but he chairs the prudential supervisory authority and a banking mediation committee, as well as attending European Central Bank policy meetings.
Villeroy de Galhau, who faces confirmation hearings later in September, has already written to parliament to say he would give up deferred compensation from BNP Paribas and get rid of all his banking shares.
But the idea of an ex-banker regulating bankers still jars. And the result is that Hollande looks tin-eared for not picking Coeure, or a well-qualified public servant from the Treasury. Who gets to run the Banque de France matters less than Hollande's inability to read the public mood. At a time when he is trying to push through wider reforms about which the electorate already seems ambivalent, this is an unfortunate failing.
