The German government chooses Joachim Nagel as head of the central bank

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German Bundesbank President Jens Weidmann, right, and then board member Joachim Nagel, left, on their way to the annual press conference in Frankfurt, Germany, in 2016. (AP file photo/Michael Probst)

BERLIN (AP) — Germany’s new government has chosen an experienced central banker and former board member of Germany’s public development bank to lead the country’s central bank, the finance minister said Monday.

Joachim Nagel will succeed Jens Weidmann, who announced in October that he would step down at the end of the year after a decade as Bundesbank president, citing personal reasons.

The governors of the national central banks of the 19 countries using the euro sit on the board of governors of the European Central Bank, made up of 25 members, who define monetary policy, as well as six members of the board of directors. In that post, Weidmann was the main skeptic of expansive economic stimulus policies, saying they relieved indebted governments to recover. But he had only one voice, and stimulus opponents were unable to stop the European bank from stepping up its efforts during and after the 2010 eurozone debt crisis. -2015.

The bank decided last week to phase out the pandemic stimulus by phasing out an 1.85 trillion euro ($2.1 trillion) bond-buying program by the end of March. It cushioned the exit by adding bond purchases to an earlier support program.

The cautious exit means analysts only expect the first interest rate hike in 2023 despite annual inflation at its highest level – 4.9% – since records began in 1997. The Bank European central denounces temporary factors that will eventually fade and affirms that the economy still needs support.

Stefan Kooths, deputy director of the Kiel Institute for the World Economy, said Nagel had “so far supported a course focused on stability in monetary policy” and “if he maintains it, it would be up to those on the ECB board who present counter-arguments to the current ultra-expandive monetary policy.That would not, however, change the majority position of the board, Kooths said.

Nagel is Deputy Director of Banking Services at the Bank for International Settlements, an international association of central banks. He was appointed to this position in November 2020. He previously served on the board of the Bundesbank and the board of the German public development bank KfW.

Finance Minister Christian Lindner wrote on Twitter that he and Chancellor Olaf Scholz named Nagel as “an experienced personality who ensures continuity at the Bundesbank”.

“Given the risks of inflation, the importance of a stability-oriented monetary policy increases,” he said.

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