ECB’s Weidmann Announces Departure from German Bundesbank
20 October 2021
By David Barwick – FRANKFURT (Econostream) – German Bundesbank head Jens Weidmann, member of the European Central Bank Governing Council, on Wednesday announced his intention to step down at the end of the year.
Citing unidentified ‘personal reasons’, Weidmann wrote in a letter to Bundesbank staff that he had ‘come to the conclusion that more than 10 years is a good measure of time to turn over a new leaf – for the Bundesbank, but also for me personally.’
Weidmann, who took over the leadership of the German central bank in May 2011, emphasised the Bundesbank’s contribution to the ECB’s recently concluded strategic review, but suggested that it had to be seen how the new strategy would be implemented in monetary policy.
‘In this context, it will be crucial not to look one-sidedly at deflationary risks, but not to lose sight of prospective inflationary dangers either’, he wrote to staff. ‘And crisis measures with their extraordinary flexibility are only proportionate in the emergency situation for which they were created.’
‘A stability-oriented monetary policy will only be possible in the long run if the framework of the monetary union ensures the unity of action and liability, monetary policy respects its narrow mandate and does not get caught in the wake of fiscal policy or the financial markets’, he continued. ‘This remains my firm personal conviction, as does the high importance of the independence of monetary policy.’
Reacting to the announcement of Weidmann’s resignation, ECB President Christine Lagarde she respected his decision, ‘but I also immensely regret it.’
‘Jens is a good personal friend on whose loyalty I could always count’, she said, observing that he disposed of particular experience as the longest-serving member of the Council
‘In the past two years we built a very strong and productive relationship based on our joint commitment to furthering European unity, fulfilling the ECB`s price stability mandate, helping the euro area economy through the unprecedented crisis caused by the coronavirus, and stabilizing the global economy shaken by the effects of the pandemic’, she said.
Despite his ‘clear views on monetary policy’, Lagarde continued, ‘I was always impressed by his search for common ground in the Governing Council, by his empathy for his Eurosystem colleagues, and his willingness to find a compromise.’
Agustín Carstens, General Manager of the Bank for International Settlements, where Weidmann has been Chairman of the Board since 2015, said in a statement that it was ‘testimony to his excellent leadership that the Board re-elected him earlier this year for a third consecutive term, a vote of confidence in his ability to guide us through these exceptionally challenging times.’
‘The Board will shortly begin the process of appointing a new Chair’, Carstens wrote.