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Eurozone finance ministers on Tuesday formally proposed Lorenzo Bini Smaghi, a senior Italian economics official, as the next member of the European Central Bank's executive board.

His appointment still to be approved by European Union leaders will bring youth to the central bank's top management, but is unlikely to lead to big changes in ECB policy, according to analysts and ECB insiders.

Mr Smaghi, 48, who has worked previously at the ECB, as well as at the Bank of Italy, is regarded as orthodox on monetary policy. He is also thought likely to support the ECB's hardline stance on stability and growth pact reform which might put him at odds with the Italian government. He will take over from Tommaso Padao-Schioppa, also Italian, who steps down in May.

Lorenzo Codogno, economist at Bank of America, said that Mr Bini Smaghi's age and strong economic credentials would make him a rising ECB star. “Over time he will come out as an important person on the board,” he predicted.

Joachim Fels, economist at Morgan Stanley, said Mr Bini Smaghi “seems to have the right background that you would expect of an European central banker” but that was not necessarily a healthy sign. “There is a risk of too much group thinking at the ECB. If you consistently choose people with a very similar background, you don't get the range of views needed for a fruitful discussion.”

Mr Bini Smaghi was educated in Brussels, where his father worked, and in the US. He is currently director for international financial relations at the Italian economy ministry.

His relatively uncontroversial appointment has been watched closely by the German government, which has made clear that it expects a compatriot to replace Otmar Issing, the German who is the ECB chief economist and executive board member. He steps down next year.

The ECB's six-strong executive board has day-to-day management responsibilities and its members also sit on the governing council, which sets monetary policy in the 12-strong eurozone.

Copyright The Financial Times Limited 2017. All rights reserved.
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