July 2, 2019 / 6:42 PM / 3 months ago

Instant View: IMF chief Lagarde nominated to succeed Draghi at ECB

FRANKFURT (Reuters) - IMF Managing Director Christine Lagarde was nominated on Tuesday to succeed Mario Draghi as president of the European Central Bank from Nov. 1.

FILE PHOTO: International Monetary Fund Managing Director Christine Lagarde is seen before attending the Women's Forum Americas, at Claustro de Sor Juana University in Mexico City, Mexico, May 30, 2019. REUTERS/Carlos Jasso

The following are economist comments on her nomination.


“The initial criticism is obvious: no central bank experience, not the top-notch economics education, another former - some might argue even current - politician at the head of the ECB.

“However, let’s not forget the old saying ‘the King is dead, long live the King’. Jean-Claude Trichet was different from his predecessor Wim Duisenberg as Mario Draghi is different from Jean-Claude Trichet.

“Hawk or dove? Actually, impossible to tell as Lagarde so far has not caught any attention with outspoken views on monetary policy.

“Christine Lagarde would probably be more of a moderator than an intellectual mastermind on monetary policy. In times, in which some ECB members have criticized too much inner circle decision-making, it would be a change.

“With Christine Lagarde, the ECB will get another excellent communicator. What kind of monetary policies Lagarde really stands for, no one can currently tell.”


“While our call that QE II is likely depends on several factors, an approval would increase our conviction, given her previous dovish remarks. The markets will probably perceive her views as dovish too. She’ll inherit a weak economy, with inflation well below target.

“In her post-G20 statement, Lagarde said that the global economy has hit a rough patch, with trade chief among the risks. She advised central banks to continue to adjust their policies with incoming data. Market participants, in our view, will probably place her in the dovish camp. In the past, Lagarde praised Draghi’s ‘whatever it takes’ commitment to preserve the euro, and has argued – and continues to argue – that governments with fiscal space should use it to cushion downturns.”


“First off, Draghi would still have to make a few policy moves before Lagarde starts. She has the finance experience and IMF experiences. She has demonstrated she is a consensus builder and a good communicator. Maybe even more than what she brings, she prevents a hawkish person from heading the ECB such as Jens Weidmann from Germany. It won’t be radical departure from what Draghi has laid out. It’s a safer course than some of the other choices that have been bantered about.”

Reporting by Balazs Koranyi; Editing by Edmund Blair

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