Christine Lagarde, President of the European Central Bank (ECB), speaks to the media following the monetary policy meeting of the Governing Council of the ECB on July 27, 2023 at the ECB headquarters in Frankfurt. Portal/Kai Pfaffenbach/File Photo acquire license rights
- Policymakers’ phones were picked up before Buch’s nomination
- Lagarde criticized the leak of the inflation forecast
FRANKFURT/SANTIAGO DE COMPOSTELA, Sept 15 (Portal) – European Central Bank President Christine Lagarde confiscated her colleagues’ cellphones at this week’s meeting and reprimanded them for revealing key information ahead of a political decision, two said Sources told Portal.
The unprecedented move is the boldest step Lagarde has taken to prevent the leak of information from the Governing Council, an issue that has dogged her presidency as well as that of her predecessor Mario Draghi.
The 26 members of the Governing Council were asked to hand over their mobile phones on Wednesday, the first day of the meeting, as policymakers were about to appoint Claudia Buch as the ECB’s top banking regulator, sources familiar with the matter said.
The cellphones were returned after Buch’s appointment as chairman of the single supervisory board that oversees more than a hundred of the euro zone’s biggest lenders was announced, the sources added.
The decision was made because the election of the current leader, Andrea Enria, in 2018 appeared in the media before the official publication, the sources said.
An ECB spokesman declined to comment.
Lagarde’s move came a day after Portal exclusively revealed that the ECB would raise a key inflation forecast this week, paving the way for a rate hike on Thursday.
Most economists and traders had expected the ECB to leave interest rates unchanged, but many changed their minds after the Portal report was published late on Tuesday.
Lagarde stigmatized the leak at the start of the two-day meeting, a criticism that was echoed by several colleagues.
DIVIDED
Lagarde inherited a divided ECB Governing Council from Draghi, who had angered so-called hawks in the north of the euro zone with his ultra-loose monetary policy and aggressive leadership style.
She has constantly tried to create a more harmonious atmosphere, and several sources agree that she has largely succeeded in this.
Ironically, their efforts have been helped by the painfully high inflation of the last two years, which reduced the scope for dissent and effectively forced the ECB into a series of interest rate hikes.
But as borrowing costs were pushed higher, more policymakers expressed reservations about further hikes, the sources said.
Lagarde said Thursday the latest increase was supported by “a solid majority of governors,” compared with all for the previous hike in July and a “very, very broad consensus” a month earlier.
Lagarde has spared no effort to woo her colleagues.
Weeks into her term in 2019, they met at a German mountain castle where she pledged to spend more time listening and not rush decisions before policymakers had input, as Draghi was often accused of doing.
In return, she urged governors to stop denigrating policy decisions once they have been made, to keep internal disputes out of the media and to put away their phones while colleagues talk.
Last year she also set informal guidelines instructing her colleagues to present the majority opinion to the public after the ECB’s monetary policy decisions, which are published on Thursdays, and to withhold “personal” views until the following Monday.
Writing by Francesco Canepa; Editing by Mike Harrison
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