What does NRC think | Tendering again at deadlines DNB requires crystal clear explanation

A follow -up procedure according to the booklet. For example, last Friday you could summarize the appointment of Olaf Sleijpen as the successor to Klaas Knot at De Nederlandsche Bank from a distance. Sleijpen has been working at DNB for years, has also been a club in the international monetary circuit for many years and he can count on great support internally and externally. Knot, who came at the end of his legal term after fourteen years, could not wish for a better successor.

Yet everything is going on with the new President of the Central Bank. Not with the person sleeping, by the way. With the procedure in which he came to float and with the aftermath of the appointment. First of all, the entire procedure lasted much longer than desired. Knot will stop as of July 1, so Sleijpen has two weeks to take over the formal tasks. In the case of Sleijpen, that is not a problem, but any other new president of De Nederlandsche Bank had irrevocably got into trouble. An unprofessional situation.

One of the reasons for the delay in the appointment would have been the salary. Knot earns five tons a year, and is therefore well above the limit of 246,000 euros that the Top Income Standardization Act uses. The PVV reportedly wanted to pin a new president. Only with the fall of the cabinet was the road clear for the coalition to deviate from the WNT again. Sleeps salary is slightly lower than that of Knot (450,000 euros) but still well above the standard.

The most problematic side on the entire procedure is that the current outgoing cabinet engages the appointment of Sleeps to talk about the central banker’s time duration. Although Sleijpen has been appointed for a period of seven years, outgoing minister Eelco Heinen (Finance, VVD) wants to adjust the Bank Act in the coming period so that a period is reduced to five years. Not out of dissatisfaction with the current president, Heinen says, but to prevent « compelling » and to guarantee « a modern supervision. »

The role of an independent central bank is crucial in an economy. This applies to both the monetary task of the bank, in the case of DNB that consists of a seat in the ECB board and to the supervisory task. The rising temperature between President Donald Trump and Federal Reserve boss Jerome Powell shows how harmful political interference in the bank’s independent position can be.

The now desired intervention from The Hague is unfortunately not on its own. Already in 2010, the then cabinet adjusted the duration of the DNB president. At the time, two periods of seven years became the maximum. Since then there has been no evaluation of that adjustment, nor have there happened in the interim accidents that justify a new intervention.

With his new proposal, Heinen is looking for the limits of the permissible. In the European regulations for central banks, the term of office of a president of a national central bank is at least five years. Germany uses a period of eight years, France six, both with possible extension.

Moreover, Heinen calls on the suspicion of wanting to attract the role of the central bank closer to politics. After all, Rewring more often means more political influence. That is the wrong way. Heinen must come up with strong arguments to justify this procedure. If they are not there, stick to the old one.

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