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'Super Mario' looks a sure shot

Friday, May 13, 2011 - 02:28

May 13 - Bank of Italy Governor Mario Draghi is the frontrunner to succeed Jean-Claude Trichet after German Chancellor Angela Merkel threw her support behind the Italian this week to become the next European Central Bank President. Darcy Lambton reports.

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Already dubbed "SuperMario" by the media - Bank of Italy chief Mario Draghi is about to move up a level. He's now widely seen as a shoo-in for the next President of the European Central Bank. That comes after France and Germany endorsed his candidacy while Italy has formally proposed him for the role. For many in the market there is no alternative. (SOUNDBITE)(English) JULIAN CALLOW, HEAD OF EUROPEAN ECONOMICS, BARCLAYS CAPITAL SAYING: "Draghi is really the outstanding candidate to succeed Mr Trichet. In fact one interesting aspect when we published our research and we were undertaking that recently on the ECB and the presidency is just how similar we would think a Draghi presidency would really be to the Trichet presidency. Of course there could be some changes over time." There's no doubt Draghi has a formidable CV. A former professor of economics, he spent six years at the World Bank. Along with his Bank of Italy role, Draghi currently heads up the Financial Stability Board. Crucially for some, he's a policymaker with market experience, serving as Vice-President at Goldman Sachs from 2002 to 2005. At that time, many banks were infecting markets globally with toxic assets. The subsequent financial crisis battered the reputation of many bankers, but not Draghi's. (SOUNDBITE)(English) LAURENT BILKE, INTEREST RATE STRATEGIST, NOMURA SAYING: "In this crisis, it is interesting to have someone in the driving seat who has crossed the borders. There's so much misunderstanding between the market and the policy makers in both ways that someone who has been crossing the borders is going to be very useful. And I actually think it's a pretty good thing he has had this experience." Many assumed a German would replace Frenchman Jean-Claude Trichet when the ECB President steps down at the end of October. A successor from Italy - with its history of inflation and cavalier fiscal policy - was perhaps less preferable. But that all changed when front-runner and now former Bundesbank chief Axel Weber pulled out the race in February. Draghi's hawkish tendencies and keen praise for German economic discipline have earned powerful admirers. And once Weber was out the picture, Berlin's backing for Draghi seemed inevitable. "SuperMario's" promotion may not be official news quite yet. But in the hunt for Trichet's replacement, most agree it's pretty much game over. Darcy Lambton for Reuters Insider.

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'Super Mario' looks a sure shot

Friday, May 13, 2011 - 02:28