On October 20th, Bundesbank President Jens Weidmann asked Federal President Frank-Walter Steinmeier to dismiss him from office on 31 December 2021. He is leaving the Bundesbank, which he has headed since May 2011, for personal reasons.

(photo Bundesbank)

"I have come to the conclusion that more than 10 years is a good measure of time to turn over a new leaf – for the Bundesbank, but also for me personally," Weidmann wrote in a letter to the Bank's staff.

In his words of thanks to the staff, Weidmann refers to the joint achievements: "The environment in which we operate has changed massively and the Bundesbank's tasks have grown. The financial crisis, the sovereign debt crisis and most recently the pandemic have led to decisions in politics and monetary policy that will have long-lasting effects. It has always been important to me that the Bundesbank's clear, stability-oriented voice remains clearly audible. With a great deal of expertise, the departments have contributed to the discussions on the right lessons to be learned from the crisis and on the framework of the monetary union. Important regulatory changes have been adopted. The reorganisation of banking supervision in Europe has not only led to completely new supervisory structures at the ECB, but also to a strengthened role for the Bundesbank. The Bundesbank's new responsibilities in the area of financial stability also underline our central role when it comes to a functioning financial system."

Weidmann thanks his colleagues in the ECB Governing Council under the leadership of Christine Lagarde for the open and constructive atmosphere in the sometimes difficult discussions of the past years and underlines the important, stabilising role of monetary policy during the pandemic, as well as the successful conclusion of the strategy review as an important milestone in European monetary policy. Weidmann points out that the Bundesbank had confidently contributed with its analytical competence as well as its core convictions to the recently concluded review process. "A symmetrical, clearer inflation target has been agreed. Side effects and in particular financial stability risks are to be given greater attention. A targeted overshooting of the inflation rate was rejected," Weidmann continues.

Looking ahead, he points out that it now depends on how this strategy is "lived" through concrete monetary policy decisions. "In this context, it will be crucial," says Weidmann, "not to look one-sidedly at deflationary risks, but not to lose sight of prospective inflationary dangers either. A stability-oriented monetary policy will only be possible in the long run if the regulatory framework of the Monetary Union continues to ensure the unity of action and liability, monetary policy respects its narrow mandate and does not get caught in the wake of fiscal policy or the financial markets. This remains my firm personal conviction, as does the high importance of the independence of monetary policy."

That comment may be a nod to ongoing discussions on the Governing Council to transfer some of the flexibility of the pandemic-induced asset purchase program, known as PEPP, to previously existing programs. This move would allow the ECB to focus its government bond purchases on individual member states, thereby removing spreads in borrowing costs and, arguably, reducing the incentive for sound fiscal policies.

He emphasises that it has been an honour and a matter close to his heart over all these years to represent the Bundesbank as an institution and to shape the Bank's positions together with his colleagues in the interest of a stable currency, a stable financial system, stable payment systems and a secure cash supply. Weidmann expressed special thanks to the members of the Executive Board. Together, they had positioned the Bundesbank as a competent and agile institution that treated its staff with respect and acted transparently towards the public.

Since the September elections, German political parties have been in the midst of discussions to try to form a government, which will be responsible, among other things, for appointing the next President of the Bundesbank.


Publié le 26 octobre 2021