Belgium, (Brussels Morning Newspaper) European Central Bank (ECB) President Christine Lagarde called on Governing Council critics to present the majority view to the public, sources say.
Four sources pointed out that she told critics to keep their dissenting views to themselves until the week after ECB’s policy decision are published, according to Reuters reported on Thursday.
Critics of ECB’s policies warned that this would limit their ability to present an honest view of the discussion. They criticise the ECB for its expansive monetary policy at a time of record-high and rising inflation in the eurozone.
Lagarde announced plans to build consensus in the ECB after taking the helm of the bank in 2019, but has been struggling with vocal critics and leaks about internal debates.
Lagarde’s guidelines and instructions are not up for a vote, are informal and show her expectations. Governing Council members will not face reprisal for deviating from the guidelines.
While the ECB announced last week that it would discontinue its bond-buying scheme in Q3 and stat upping interest rates after that, some EU central bank governors called for faster tightening of the policy.
Guidelines apparently effective
Lagarde’s guidelines apparently left a mark as head of the German central bank Joachim Nagel and his Belgian counterpart Pierre Wunsch held back their criticism of ECB’s plans until this week.
Lagarde’s critics warned that her guidelines suppress dissenting voices as they are supposed to hold back their criticism until after the news cycle moves on, stressing that this limits their ability to communicate.
In addition, critics stress that the guidelines are self-defeating as they incentivise Governing Council members to present their views to the press anonymously.
“Do you want leaks? Because this is how you get them,” one source noted and pointed out “if people can’t speak openly, they’ll still talk, but using different channels.”
Lagarde’s supporters noted that criticism of ECB policies sows doubt and undermines the decision, stressing that critics should keep quiet until the week after.
US Federal Reserve rules allow only the head to comment publicly on decisions for a day and a half after adoption, but critics are not requested to present or defend majority views.