This Friday, President Andrés Manuel López Obrador announced that Alejandro Díaz de León will not repeat in office.
How is the governor of Banco de México chosen and who are the candidates?
In what appeared to be a ‘well known’ decision, President Andrés Manuel López Obrador confirmed that Alejandro Díaz de León, the current governor of the Bank of Mexico (Banxico), will not repeat in office.
“The term of the president of Banxico is ending and according to the law, it is up to the head of the Executive Branch to send the proposal to the Senate and I will do it,” he said on his ‘morning’ this Friday.
The president even outlined the profile of Díaz de León’s successor, assuring that he must be an “economist with a social dimension, very in favor of moral economy .”
So, you may wonder: How is this process done? Here’s a guide:
The Bank of Mexico Law indicates that the position of governor lasts six years, but when Díaz de León leaves office on December 31, 2021, he will have barely completed four.
-What is this about? Diaz de León is actually concluding the period started by his predecessor, Agustín Carstens, who left the Central Bank in 2017 to join the International Settlement Bank. Therefore, after December 31 of this year, Díaz de León will no longer be part of Banxico.
-Now, returning to the issue of the governor, President López Obrador has two options: the first is to appoint one of the four members who currently make up the Governing Board, three of whom were appointed by him as governor.
Who are the current deputy governors?
Who is emerging as the ‘favorite’ for the succession in Banxico who worked with López Obrador during his third campaign for the Presidency? Esquivel, a graduate in Economics from the National Autonomous University of Mexico (UNAM), was an external advisor to the campaign of the current head of the Executive.
In an interview with Bloomberg in February this year, Esquivel said he was not interested in the position of governor of the Central Bank and expressed his support for Díaz de León to be ratified by the president.
Esquivel was one of the first two deputy governors that López Obrador proposed in 2018 to serve on the Governing Board of Banco de México. The other is …
He became the first person to be appointed as a deputy governor from the private sector since 2009.
Heath began his professional career building macroeconometric models for the Government of Mexico and Wharton Econometrics, in addition to serving as a professor at the Universidad Autónoma Metropolitana Azcapotzalco, the Tecnológico de Monterrey, and the Universidad Iberoamericana, among other institutions.
The least senior member of the Governing Board. Before joining Banco de México, the degree in Mathematics from UNAM was a fundamental part of the distribution of resources to López Obrador’s social programs since she was the head of the Federation’s Treasury.
Borja is a person who has already collaborated with the president since he worked in the Ministry of Finance of the Government of the then Federal District between 2001 and 2007.
She had a similar trajectory to Borja’s, as she went from the Federation Treasury to the Central Bank when she was proposed to be deputy governor by former President Enrique Peña Nieto.
She is a teacher in Public Policy with a specialty in Socioeconomic Evaluation of Projects and an economist from the Autonomous Technological Institute of Mexico (ITAM), where she received the Miguel Palacios Macedo award for academic excellence. She began her professional career in 1988 as a researcher at the Center for Economic Studies of the National Bank of Mexico (Banamex).
And what is the other option?
The Central Bank Law states that the president can appoint a new member to the Governing Board and, once this is done, appoint the governor from among its five members.
That is, if the deputy governors do not meet the profile of ‘moral economist’ that López Obrador seeks, an external figure could become the governor of the Bank of Mexico, someone like …
The current Secretary of the Treasury. Herrera has been part of López Obrador’s cabinet since 2018, first as undersecretary of the agency and then as its head, after the surprising resignation of Carlos Urzúa.
He was a practice manager for the Public Service and Performance Unit for Latin America and the Caribbean, part of the World Bank’s Global Governance Practice.
Herrera, who has a doctorate in Economics from New York University, has been in charge of the country’s finances in one of the most difficult moments, during the management of the COVID-19 pandemic.
In both scenarios, the president’s proposal must be approved by the Senate.