The date is fixed. On January 13, the Federal Financial Supervisory Authority (BaFin), Germany’s financial regulator, will hold its new year’s press reception in Frankfurt. Its significance? The occasion will probably see Elke König, BaFin’s president, make her last speech in the role.
Later in the new year, Ms. König will become the director of the Single Resolution Mechanism, or SRM, a new E.U. agency being set up to handle the winding down of failing banks on the continent.
Born as result of the financial crisis, which saw several banks go down in flames or require billions in taxpayer handouts to stay afloat, the SRM is required to be up and running by 2016. It will be financed via a banking levy, with the cash raised used to limit the fallout of any future bank collapses.
On Tuesday, the European Parliament approved Ms. König’s appointment with an overwhelming majority. Sign-off by the E.U.’s Council of Ministers, which consists of a political representative from each E.U. member country, is considered a formality and should be issued today.
For Germany’s minister of finance, Wolfgang Schäuble, the appointment of Ms. König is a curse and a blessing. On the one hand, someone from the German government is being given a top European job, which is a rare occurence. But on the other hand, Mr. Schäuble is losing a top executive.
The successful candidate will need to make sure Bafin's voice is heard in encounters with the new bank-supervisory agency of the European Central Bank, which has just assumed responsibility for all banks in the European Union
The word in government circles is that the successor will be found quickly.
The ministry of finance, which oversees BaFin, is keen to to avoid a messy handover like the one between Jochen Sanio and Ms. König in 2011. Months went by before Ms. König was appointed and the salary negotiations with Ms. König, who comes from private industry were also an unwelcome distraction.
It is highly likely that an internal candidate will be chosen as Ms. König’s successor. Politicians and observers often mention the name of Felix Hufeld, the BaFin executive responsible for keeping an eye on the insurance industry.
But there are also concerns that Mr. Hufeld is too much of an insurance specialist and has too little banking expertise. The successful candidate will need to make sure Bafin’s voice is heard in encounters with the new bank-supervisory agency of the European Central Bank, which has just assumed responsibility for all banks in the European Union. On the other hand, Mr. Hufeld has shown that he can quickly acquire familiarity with complex issues.
External candidates may also be under consideration.
Mr. Schäuble also has to find a replacement for BaFin’s securities-monitoring division, Karl-Burkhard Caspari. The 63-year-old will be leaving his job in the first quarter of 2015 for health reasons.
If Mr. Hufeld becomes the new head of BaFin, the finance ministry will certainly want for a woman to head either the insurance- or securities-monitoring division. Those decisions will not be made until 2015.
The finance ministry is also keen not to repeat the mistakes it made in its search for a successor to Christopher Pleister, the president of the Federal Agency for Financial Market Stabilization (FMSA), also known as the bank-rescue fund. Mr. Pleister is leaving at the end of the year, but only now has a successor been found: the former head of Dresdner Bank, Herbert Walter, who currently works as a consultant.
Mr. Walter’s nomination has drawn criticism from German opposition parties. Gerhard Schick, the Green Party’s spokesperson for financial policy, has called upon the government to clarify Mr. Walter’s role in Commerzbank’s takeover of Dresdner Bank in 2008. Otherwise, Mr. Schick says, doubts could arise as to whether, in view of the state’s share in Commerzbank, he consistently represents the interests of taxpayers.