ECB Hawk-Dove Ranking: Lagarde, Lane and other Governing Council Members Reranked

1 February 2023

By David Barwick – FRANKFURT (Econostream) – Econostream’s latest ranking of the 25 members of the European Central Bank Governing Council in terms of hawkishness/dovishness has been subjected to a thorough review that has led to a change of ranking in six cases.

All six Council members whose standing has been modified have been classified as more hawkish than previously. This includes first and foremost President Christine Lagarde. Although we think she will have little trouble pivoting when the time comes – October was probably an example of this, albeit a premature one – she seems to have genuinely put behind her, at least for now, the dovishness that characterised her previously, and we want the ranking to reflect this.

That her ranking hasn’t changed more substantially we consider correct. Lagarde, who is neither an economist nor from a member state whose central bankers have tended to go to Frankfurt with a clear agenda, sees herself as tasked mainly with shepherding her fellow Council members towards consensus, so that she is likely to be in the vicinity of the centre.

We have also modified Chief Economist Philip Lane’s ranking to make him marginally less dovish. There is no question as to the fact that he leans quite dovish, and that through thick and thin. However, whilst the reasons may be practical, he seems to have become slightly less dovish, and in any case is not quite on a par with his colleagues at the dovish end of the spectrum.

The other Council members we have reranked are:

• Central Bank of Ireland Gabriel Makhlouf, who we have classified as mildly rather than significantly dovish, loosely speaking.
• Bank of Finland Governor Olli Rehn, whose previously marginally dovish ranking simply doesn’t correspond to his repeated public statements. He is now ranked as clearly hawkish.
• Banka Slovenije Governor Boštjan Vasle, who was already ranked as clearly hawkish but now slightly more so.
• Bank of Lithuania Chairman of the Board Gediminas Šimkus, also already classified as clearly hawkish, is now ranked significantly more so.

We have not yet modified the neutral ranking of Boris Vujčić, Governor of the Croatian National Bank, who is a fully-fledged Council member as of exactly one month ago, when Croatia acceded to the Eurozone. We expect to assign him a relatively hawkish standing in the coming weeks.

Naturally, these changes result in an increase of the average hawkishness/dovishness of the Governing Council. It remains the case though that, even with the increase in the average for the Executive Board alone, the average hawkishness/dovishness of the Council without the Board is substantially higher than with it.