Executive director Hoogduin tipped as Wellink’s successor

Lex Hoogduin, an executive director at The Netherlands Bank, is the favourite to succeed Nout Wellink, its current president, when Wellink's term expires next July.

Hoogduin, responsible for the key stability and markets portfolios, has been touted as the next head following Dutch finance minister Jan Kees de Jager's proposal to impose a two-term limit on the presidency, put forth last Tuesday.

The proposal is expected to pass into law soon, bringing Wellink's reign to an end when his second seven-year term expires at the beginning of July 2011.

Media outlets, such as Het Financieele Dagblad, a Dutch business newspaper, and Bloomberg and Reuters, two newswires, have painted Hoogduin as the favourite, highlighting that the central bank has raised his public profile over the past three months, giving him the task of explaining the central bank's economic forecasts on radio and television. Speculation was further stoked on Monday when Arnoud Boot, a member of the Bank Council that advises the governing board, was quoted by Bloomberg confirming that Hoogduin's increased responsibilities were a sign that he was "being seen [by the central bank] as the most likely successor."

Hoogduin is also advising the politicians who will form the new Dutch coalition government: a task that normally falls to the central bank's president. Under the Netherlands' law, the country's finance minister must nominate Wellink's successor. The central bank's executive and supervisory boards must then weigh in with their recommendations, following which a parliamentary majority is needed, before an appointment can be made by the Queen.

Hoogduin has worked for the central bank for nearly 20 years, serving stints as director of the research division, head of the monetary and economic policy department, and as the adviser to Wim Duisenberg, the former president of The Netherlands Bank and the European Central Bank. He became an executive director in January 2009. His comprehensive experience at the central bank, along with his calm and reserved demeanour, has amplified his leadership potential.

Within the governing board, Joanne Kellerman, the executive director for pension and insurance industry supervision and the legal department, is considered to have an outside chance. Kellerman was formerly the general counsel. Boot, who on Monday furthered speculation that Hoogduin is being primed for the presidency, is himself also considered dark horse.

Outside the central bank
However, Wellink's replacement could come from outside, given the criticism it faced as the Netherlands' main financial regulator, over the failure last October of Dirk Scheringa Beheer (DSB), a lender. That incident, along with the near collapse in 2008 of ABN Amro, another Dutch bank, has scarred on the central bank's reputation. Wellink in June faced a motion of no confidence in parliament's lower house. De Jager, the Netherlands' finance minister, has also called for a culture change within the central bank, pointing out that its operational failures where found, in part, to be responsible for the collapse of DSB. Amenability to forthcoming change is therefore a key attribute in the central bank's next governor. This is thought by some to give candidates who were not at the central bank during the crisis an advantage.

Dutch media have speculated that Jan Pieter Balkenende, the Netherlands' outgoing prime minister, could be a possible candidate. However, Balkenende has not studied economics. Wouter Bos, a former finance minister who resigned in February and retired from politics in March, is considered a stronger candidate, having studied economics and worked for Royal Dutch Shell, an oil company.

Willem Buiter, a former member of the Bank of England's Monetary Policy Committee, is also favoured in some quarters for his experience at a major central bank, and solid background in monetary economics. Of the candidates external to the central bank, Buiter, who is now the chief economist at Citi, an international banking group, is considered the best qualified for the role.