ECB Member Warns Germany of Central Bank’s Independence

A key member of the European Central Bank (ECB) has fired a not-so-subtle warning to Germany over the central bank’s independence.

Yves Mersch, an executive board member of the ECB’s monetary decision-making body since 2012, told the Frankfurt Finance Summit Tuesday, that the ECB’s flexibility and autonomy should not be challenged.

“If some countries want now to have an extensive amount of constraint and limitation on how we exercise our monetary policy powers, this will be an attack on the independence of the central bank,” he told the audience.

“I hope this is well understood even in the largest country in Europe,” he said to the German audience, ad-libbing from prepared remarks.

The most vocal critics of the ECB’s easy monetary policy in recent years has come from within Germany. Bundesbank President Jens Weidmann has consistently criticized the slow normalization of asset purchases and interest rates in the region.

Luxembourg-born Mersch was giving a speech in order to outline why the ECB needs new policy tools if it is to supervise firms that clear financial transactions denominated in euros.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza