Carstens, Bank of Mexico governor, has been named General Manager of BIS

8 years ago - Published in Finance, Fundamental Analysis

The Bank of Mexico governor, Agustín Carstens, will step down in July 2017 to become the next general manager of the Bank for International Settlements (BIS).

Carstens will serve as general manager of the BIS, which is headquartered in Basel, Switzerland, for a five-year term, succeeding Jaime Caruana, who has been in the position since 2009. The bank is the world’s oldest international financial institution and serves as a bank for central banks. Its goal is to foster international monetary and financial cooperation. It hosts bimonthly meetings of top central bank officials and publishes regular research reports.

"Today (Thursday), Dr. Agustín Carstens presented to [President] Enrique Peña Nieto his resignation from the position of governor of the Bank of Mexico, effective from the first day of July 2017 … in order to be able to accept the designation as general manager of the Bank for International Settlements," the Bank of Mexico said in a statement. "It will be the first time a central banker from an emerging economy, such as Mexico, will occupy that high position."

Sixty central banks, making up about 95% of the global gross domestic product, are BIS members.

Reuters described Carstens as “highly respected among international investors.” Governor of the Bank of México since 2010, he was expected to remain in the post until 2021 after the Senate ratified in September the renewal of his contract for another six years.

Finance Secretary José Antonio Meade said that Carstens’ appointment to the BIS is a reflection of the confidence he has generated through his management of the bank and testimony to his good track record.

Announcing the appointment, Jens Weidmann, Chair of the BIS Board of Directors, said: “The Board of Directors is delighted to have secured a person of Mr Carstens’s remarkable calibre and international experience to be the next BIS General Manager. He is held in high regard in the central banking and international financial communities and already has a strong relationship with the BIS.”

According to the latest BIS annual report, the general manager salary is 743,410 Swiss francs ($733,500); he also receives an “annual representation allowance and enhanced pension rights,” according to the BIS annual report.