Three years ago, on August 9 2007, the European Central Bank shocked the world. As the global financial crisis first blew up, it acted quickly to provide emergency liquidity, pumping in €95bn. The surprise was not so much that rescue action was needed, but that the Frankfurt-based ECB had taken the global lead. Stuffy European institutions were not supposed to be as nimble.
With Europe’s banks already then in the eye of the storm, the ECB was fortunate to have an experienced crisis manager as president. Jean-Claude Trichet had handled financial market turmoil since his days as a French treasury official in the 1980s. Trained initially in mathematics and physics, and with a passion for poetry, Mr Trichet has since that fateful day overseen undreamt-of steps by the ECB to shore up the eurozone’s banks and economies. Read more
The arrival of Vítor Constâncio as the European Central Bank’s new vice-president this week has led to a reshuffling of responsibilities on the bank’s six-person Frankfurt-based executive board. For ECB-watchers, the obvious questions are: who’s up and who’s down? I am not sure if much has changed.
As expected, Mr Constâncio, a former Portuguese central bank governor, will take over responsibility for financial stability issues from his predecessor, Lucas Papademos. That will take up much of his time in coming years, so it is probably not a big deal to him that responsibility for ECB research has been transferred to José Manuel González-Páramo, perhaps the biggest winner from today’s moves. Mr González-Páramo remains in charge of market operations – a busy beat in recent years. Read more
Jean-Claude Trichet, president of the ECB, today praised the creation of the euro at the opening of museum exhibit opening in Germany.
Since the creation of the euro, it has become clear how important a role the single currency can play in the realisation of an ever closer union among the peoples of Europe…Also, on the international stage, people have confidence in the euro as a currency. And this confidence is crucial.
It took them a while to react, but central bankers are beginning to voice their approval of US plans to limit bank trading, aka the ‘Volcker plan’.
Yesterday Mervyn King voiced his approval, saying that, thanks to Mr Obama’s plan, ‘radical reform’ was at last on the table. He qualified his support by saying any measures should be part of a ‘major structural change’; one proposal alone would not solve the problem. Read more
Trichet is widening his vocabulary on the euro, writes Ralph Atkins of the Financial Times Read more