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NATO Secretary General Jens Stoltenberg has emerged as the favored candidate to become Norway’s next central bank chief in a race that’s raising questions over Norges Bank’s independence.
Norway’s former prime minister Stoltenberg faces 21 competitors including Deputy Governor Ida Wolden Bache, according to a statement from finance ministry on Tuesday that reiterated a plan to name a replacement for outgoing Oystein Olsen early next year.
While reports of Stoltenberg’s interest for the job had circulated in local media earlier, the confirmation has turned the 62-year-old into a new front-runner instead of Wolden Bache. It also brings to the fore a controversy linked to Stoltenberg’s close affiliation with the ruling Labor Party and Prime Minister Jonas Gahr Store.
The race “will likely end up with Stoltenberg coming on top,” Nordea Bank Abp’s economist Dane Cekov said. “Wolden Bache still has a very good chance and the margins are slim.”
When Olsen announced in August he will step down at the end of February after an 11-year term, Wolden Bache was pegged as the favorite and potentially the first female central bank chief in Norway. The 48-year-old has a PhD from Oslo University, and has held various posts at the central bank since 2013.
Read More: Norway Could Make History With First Female Central Bank Chief
An economist by training, Stoltenberg has been prime minister of Norway twice and has also held the finance minister’s portfolio, while he has no monetary-policy experience. Prime Minister Jonas Gahr Store is his political apprentice and a close friend. Opposition politicians, including former Prime Minister Erna Solberg, have said picking Stoltenberg would raise concerns over central bank independence.
“It’s a difficult question” but “I would believe that he would do his utmost to protect the integrity of the central bank if he were to become governor,” Nordea’s Cekov said.
While Wolden Bache would be the preferred candidate “when it comes to managing monetary policy in particular,” Stoltenberg has an advantage with regards to managing large institutions, Cekov said, referring to the fact that Norges Bank oversees the nation’s $1.4 trillion wealth fund, the world’s largest.
Stoltenberg, whose term at the helm of the North Atlantic Treaty Organization runs until October, said he is “very motivated” for the governor’s job, according to NTB newswire. Stoltenberg also said he had been asked last month by the finance ministry to apply and that if picked, he wouldn’t be able to assume the position before Oct. 1, according to NTB.
The Oslo-based bank has been one of the most hawkish among the developed nations, having embarked on a tightening cycle in September.
With the oil-rich economy already above pre-pandemic levels, it is expected to raise rates borrowing costs again this month even as measures to stem the omicron variant have clearly raised the chances of the hike being postponed.
(Updates with Stoltenberg comment, details from first paragraph)
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