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
The ”great financial crisis” we are still living through may be the worst economic disturbance since the second world war, but the European Central Bank does not see any great need for it to change the way it operates monetary policy. That is the main impression I have at the end of two-day Frankfurt conference (“The great financial crisis: lessons for financial stability and monetary policy”) marking the departure of Lucas Papademos, its vice president.
As I noted yesterday, no clear answers emerged on just how financial stability responsibilities should be combined with price stability objectives. But ECB speakers were clear that their “monetary pillar” – their analysis of monetary aggregates and credit data – had proved its worth during the crisis. In his closing speech, Mr Papademos argued it would help the ECB “lean against the wind” against asset prices, even if such a policy were not explicit. Read more