Business View: The ECB must be led by a Frenchman, and any old Frenchman will do

George Bush and Tony Blair may rail against French duplicity in the United Nations. But neither Washington nor Downing Street can do anything about les shenanigans français at the European Central Bank.

To continue the Iraq analogy, it is no more than five minutes to midnight on the decision about who will replace Wim Duisenberg as president of the ECB in July. Dim Wim will make his last unconvincing comments to the markets on 9 July and the next day his successor will get on his hind legs and present the results of the ECB's monetary policy review.

But who will that successor be? Officially the ECB isn't saying. Semi-officially its officials are sticking to the line they've pushed since 1998 when, in a classic Euro- pudding pact, the French agreed to allow a German nomination for ECB president (who happened to be Dutch, but let's not quibble) in return for getting a Frenchman in come 2003. This favoured French financier has always been Jean-Claude Trichet, the Governor of the Bank of France. The trouble with M Trichet is that he is facing criminal charges over his role in the near collapse of Crédit Lyonnais in the early 1990s, a time when he was France's chief banking regulator.

The ECB – and indeed the Elysée – have taken an astonishingly relaxed attitude to this criminal case, as if they think it will somehow disappear in a puff of Gauloises smoke. But it just won't go away. Last week the prosecutors recommended that M Trichet receive a 10-month suspended sentence if he is found guilty. A final ruling is expected on Wednesday.

If he is found guilty, the ECB gig is up. He will appeal, but even if he succeeds, he will not be acquitted by 10 July.

So what's the alternative? For a French solution the obvious choice is Christian Noyer, the former vice president of the ECB. In Frankfurt the background burble is that M Noyer is a shoe-in. But hold on. Doesn't the Maastricht Treaty, which set the terms of reference for the creation of the ECB, preclude its top executives being reappointed after they have left the bank? Here comes le fix. In a masterstroke, the supporters of M Noyer have argued that this rule only applies if you are re-appointed to the same role. It does not stop a promotion, even if it is a promotion after a period spent outside the bank.

And if this does not work, there is Plan C. This involves hauling Roger Lemierre out of the European Bank for Reconstruc- tion and Development and packing him off to Frankfurt. The downside of this for the French is that they will almost certainly have to concede a non-French boss of the EBRD, but this seems a sacrifice worth suffering.

Plan D would bring one of the former ministers Dominic Strauss-Kahn or Laurent Fabius out of semi-retirement and foist him on the ECB. This will not be popular with Jacques Chirac as both are socialists. However, given the alternative of having an Italian or a Spaniard or, Mon Dieu, a Belgian at the helm of the ECB rather than someone French, it would be a small price to pay.

Lucky Luqman?

Even more curious than the goings-on at the ECB are those on at the Euston Road at the new home of Abbey National. Luqman Arnold, the Indian/British/American/Swiss new boss, is gearing up for a big shake-up of the ailing high-street bank later this month. In preparation, he announced last week that Abbey was closing the with-profits funds of its two life companies, Scottish Provident and Scottish Mutual, and in effect winding the businesses down.

This bitter pill came with some interesting comments about withdrawing from equities and minimising risk. But my friends down in the derivatives markets are confused. They think that Abbey is taking a punt on a recovery in the equity markets, which could pay off later this year.

Late last month someone bought a massive amount of November call options (that's a right-to-buy in simple parlance) on FTSE 100 futures at a price of between 3,600 and 4,000. This means that if the FTSE 100 – which closed on Friday at 3,599 – rises even a little by then, this buyer will start making money. Should the FTSE 100 get to more than 4,000, this gamble will recoup hundred of millions of pounds.

All the traders think the buyer is Abbey National. It's a long shot by Mr Arnold to save the high-street bank – but it just might work.

j.nisse@independent.co.uk