Lagarde backs Centeno for presidency of the European Banking Authority

Mário Centeno could become the new president of the European Banking Authority (EBA), the body responsible for coordinating banking sector regulation at European level, which is preparing to lose its president, according to information gathered by ECO.

The former governor of the Bank of Portugal, who left office amid tension with the government, is the choice of the president of the European Central Bank (ECB), after Christine Lagarde tried in the summer to intercede with Luís Montenegro to renew the former finance minister’s mandate at the head of the Portuguese supervisor.

The presidency of the EBA requires a competition, which opened last week, and although the choice to lead the European regulator from February next year — succeeding Spain’s José Manuel Campa, who is leaving office before the end of his term for personal reasons — still has to be approved by the Board of Supervisors, Mário Centeno is one of the frontrunners, meeting the criteria for the position. ECO contacted Mário Centeno, who declined to comment.

Less than a month after handing over the reins of the Bank of Portugal (BdP) to Álvaro Santos Pereira, Mário Centeno, who had indicated that he would remain at the Portuguese banking supervisor, now has a new position in sight, this time at European level, a field with which he is familiar. If the outcome is successful, he will be responsible for coordinating banking regulation at European level, playing an important role in conducting bank stress tests, which assess the sector’s resilience to a crisis.

ECO knows that his experience as president of the Eurogroup, when he was finance minister, is one of the Portuguese candidate’s advantages, along with his positive relationship with European Central Bank (ECB) President Christine Lagarde, which dates back to when they met in the corridors of Brussels in the context of the Eurogroup and ECOFIN.

The ECB has no formal role in choosing the new EBA president, but Lagarde’s support could work in Centeno’s favour in diplomatic circles. ECO contacted Frankfurt, which declined to comment on the matter.

The EBA presidency is not the only opportunity available to Centeno, according to those closest to him. While this window is open until 7 November, the deadline for submitting applications, there are other moves in top positions at European level, including at the European Central Bank, which Centeno may be considering in a few months’ time.

One of these, in May 2026, is that of vice-president of the ECB, succeeding Spain’s De Guindos. This was one of the arguments used at the political and financial level to pressure the government to renew Mário Centeno’s mandate. In office, he would be in a stronger position to be chosen by European leaders for that role. The government did not go along with this strategy and signalled that it would evaluate this possibility if it were to materialise.

‘Best wishes to my friend Centeno’

When the former finance minister left the leadership of the Eurogroup in 2020, the ECB president thanked Centeno for his ‘excellent collaboration’ and ‘contribution to Europe’. Later, when he took office as governor, she wished her ‘friend Mário Centeno’ success. ‘Best wishes to my friend @mariofcenteno in his new role as governor of @bancodeportugal and also as a member of the ECB Governing Council,’ the Frenchwoman wrote in a Twitter post.

Recentemente, ainda antes do Fórum BCE em Sintra, ambos estiveram juntos no retiro anual do Conselho de Governadores no Porto. Após o encontro, Lagarde assinalou “a organização impecável” de Centeno e da equipa do Banco de Portugal, escrevendo numa publicação no Twitter em português: “sinto-me muito grata”.

This closer relationship even led the ECB president, at the height of the crisis in relations between Mário Centeno and the government, to try to contact Luís Montenegro about the change at the head of the Portuguese banking regulator, without success, because the decision by the prime minister and the finance minister not to renew his mandate had already been made. Now a new door is opening for a top position.

Spain’s José Manuel Campa resigned as head of the EBA in early September and will leave office on 31 January. The current president of the European regulator was first appointed president in 2019 to serve a term until 2024, when he renewed his contract for another five years (until May 2029).

However, Campa cited personal reasons for leaving the position prematurely, and at the time, the authority told Bloomberg that it was ‘taking all appropriate measures to ensure a smooth transition until the appointment of the new president.’ The president must go through a series of procedures to be elected. The first of these is to apply for the competition launched by the European regulator on 7 October, which ends on 7 November, by sending a curriculum vitae and a letter of application.

An official source at the EBA explained to ECO that, subsequently, ‘a pre-selection committee will be set up to analyse the candidates’ application documents, taking into account the eligibility and selection criteria’, which will ‘draw up a list of up to ten candidates who best match the desired profile for the interview’. ‘After the interviews, the pre-selection committee will submit a pre-selection of up to six most suitable candidates and an assessment report to the EBA Board of Supervisors,’ he points out, adding: ‘We have no further details at this time.’

According to the competition rules, the pre-selected candidates will then be invited to give a presentation on a predefined topic to the EBA Board of Supervisors, followed by a further interview. On this basis, the Board of Supervisors will draw up a shortlist of candidates considered most qualified for the chairmanship of the regulator, with the assistance of the European Commission. On the basis of this list, the Board will adopt a decision on the appointment, after confirmation by the European Parliament.

The EBA Board of Supervisors is composed of the heads of banking supervision in 30 national supervisory authorities in the European Union and the EEA-EFTA, who are sometimes accompanied by a representative of the national central bank. It also includes representatives of the European Commission (EC), the European Systemic Risk Board (ESRB), the ECB, the Single Supervisory Mechanism (SSM), the Single Resolution Board (SRB), the European Securities and Markets Authority (ESMA), the European Insurance and Occupational Pensions Authority (EIOPA) and the EFTA Surveillance Authority.

As chair of the EBA, Mário Centeno would represent the European regulator, based in Paris, and oversee the institution’s work, including leading discussions in the Board of Supervisors. He would serve his five-year term, renewable once, from Avenue André Prothin, in La Défense, Europe’s largest business district and the fourth largest in the world.

His right-hand men would be Helmut Ettl, vice-president of the EBA and executive director of the Austrian Financial Market Authority (FMA), and François-Louis Michaud, executive director responsible for supervising the EBA’s day-to-day operations and preparing the meetings of the Management Board.

However, the former governor’s options may not end there. Three terms are coming to an end shortly at the ECB, and Lagarde would play a more active role in this outcome. Next year, the position of Vice-President Luís de Guindos, who succeeded Vítor Constâncio in 2008, will become vacant, and in 2027, the terms of Isabel Schnabel and Chief Economist Philip Lane on the board will come to an end. However, Centeno would have to count on the goodwill of the government.

Favourable criteria… and a salary of €25,000

The competition launched by the EBA is open to nationals of any European Union country, Iceland, Liechtenstein or Norway, who must have at least five years’ proven experience in a senior position related to the scope of the authority.

As advantageous criteria, candidates must have ‘in-depth knowledge and proven experience of financial regulations and/or supervision/oversight at national, EU or international level’, of EU institutions and decision-making processes, as well as of European and international activities relevant to the EBA’s activities, and of the EU’s political and legal environment, and ‘proven negotiating experience at European and international level’.

The position of president is a temporary role, with a gross base salary of €20,536.29 in grade 1 or €21,399. €27 in grade 2, subject to annual review, plus a correction coefficient applicable to France (currently 114.2%), which reflects the living conditions in the city, as well as a management allowance (4.2% of the basic salary), subject to the successful completion of the nine-month trial period.

The position also offers specific entitlements, such as the expatriation allowance — corresponding to 16% of the basic salary — relocation allowance, reimbursement of removal expenses, initial temporary subsistence allowance and others.

What does the EBA do and how does it work? Here are five key points:

• The EBA is an independent European Union authority, founded in 2011 in the wake of the Great Financial Crisis, and led by a chairperson and an executive director.
• Its main tasks include setting consistent rules for European banks, ensuring a level playing field and protecting consumers of financial services, with the ultimate goal of contributing to financial stability.
• It has two main governing bodies: the Board of Supervisors, which makes policy decisions, and the Management Board, which oversees the work.
• The Board of Supervisors is the Authority’s main decision-making body. It is responsible for all the regulator’s policy decisions, such as the adoption of draft technical standards, guidelines, opinions and reports.
• The role of the Management Board is to ensure that the Authority fulfils its mission and the tasks assigned to it. To this end, it has the power to propose, among other things, the annual work programme, the annual budget, the staff policy plan and the annual report, according to the institution’s website.

The farewell letter

In his farewell letter to the employees of Banco de Portugal when he stepped down as governor, Mário Centeno pointed out that ‘the banking system has successfully completed a reversal of the economic and financial cycle that began almost 10 years ago.’

In this regard, he highlighted the sale of EuroBIC to Abanca in 2024 and the recent proposal to acquire Novobanco by France’s BPCE. ‘Today, the banking system has indicators that lead the euro area in many dimensions. In its cost structures, profitability, capital and cost of risk. No one would have said just ten years ago that all this would be possible,’ he pointed out.

The former governor highlighted “the many dozens of meetings” he held with Portuguese banking officials and “the active, not reactive or passive, commitment of the Bank of Portugal to the sector”.

Centeno also advocated improvements in risk management and progress in the Legal Services Department. ‘Managing means taking risks, even in inaction. The network I have always sought came from the DJU. But not an uncritical network, one that I have always challenged with economic reasoning to find solutions. This was the case for decisions about the financial system; it was the case for the day-to-day management of the Bank,’ he said.

At his last hearing as governor of the Bank of Portugal in September, Mário Centeno said that he would remain at the Bank of Portugal after stepping down, taking on the role of advisor. ‘It is clear that I will stay. Do you know what 35 years of a career means?’ he asked the MPs.

‘I have been an employee of the bank for 35 years. I have a career at the bank, which has very clear rules about what employees do after they leave the board of directors,’ he replied to MPs at a hearing of the Committee on Budget, Finance and Public Administration (COFAP). ‘There are countless cases [of consultants]: Hélder Rosalino, José Matos, Pedro Duarte Neves… my case is no different,’ he added, giving examples of former members of the board of directors who became consultants to the Bank of Portugal.