MNI SOURCES: Lane Favourite For Next ECB Chief Economist

     LONDON (MNI) - Central Bank of Ireland Governor Philip Lane is the clear

favourite to be the European Central Bank's next chief economist now that

Italian Andrea Enria has been nominated to take over the ECB's banking

supervisor, at least five ECB sources told MNI.

     The conclusion of the race to succeed Daniele Nouy, whose five-year term as

chair of the Supervisory Board expires at the end of 2018, filled the first

piece in a jigsaw of major ECB appointments over the next year, with Chief

Economist Peter Praet stepping down after May 31 and President Mario Draghi

leaving in November.

     Enria, whose appointment has still to be confirmed by the European

Parliament and member states, beat Ireland's Sharon Donnery in a secret ballot

Nov. 7, thanks to support from southern European countries and from Draghi

himself, different sources said. As the current head of the European Banking

Authority, Enria was seen to be extremely well qualified for the job, and his

orthodox views on maintaining regulatory standards countered any potential fear

that he might be tempted to go easy on his own nation's banks, whose stock of

non-performing loans is one of the eurozone's biggest financial problems.

     Only the Italian government, in trouble with the EU for violating fiscal

rules, is understood to view Enria with suspicion.

     --RESPECTED ECONOMIST

     Similarly, Lane, widely respected as an economist, is regarded as the most

obviously competent replacement for Praet, with the same centrist, model-based

approach, the sources said. One of his possible rivals, Estonia's Ardo Hansson,

has been associated with more hawkish views.

     Praet's successor will be inherited by the next head of the ECB.

Frontrunners for that role, a highly political appointment, include De

Nederlandsche Bank President Klaas Knot, former Bank of Finland chief Erkki

Liikanen and still, despite an apparent decision by his own government to

prioritise a German candidature to head the European Commission, the

Bundesbank's Jens Weidmann. Francois Villeroy de Galhau, of the Banque de

France, is understood not to be campaigning but to be available if a call were

to come.

     Whoever replaces Praet, the ECB is eager to start the selection process

soon and have it approved well before the European Parliament elections in May,

thereby preventing it from being caught up in the subsequent political

horse-trading over the presidencies of the ECB, the European Commission and the

European Council.

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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