Title: ECB President Christine Lagarde Seizes Phones, Calls Out Leaks Ahead of Policy Decision
Date: September 15, 2023
Frankfurt/Santiago de Compostela – In an unprecedented move, European Central Bank (ECB) President Christine Lagarde confiscated the mobile phones of fellow policymakers at this week’s meeting, citing leaks of crucial information ahead of a policy decision. Lagarde’s decisive action demonstrates her commitment to ending the persistent problem of information leaks within the Governing Council, a challenge she inherited from her predecessor, Mario Draghi.
Sources familiar with the matter revealed that Lagarde ordered the 26 members of the Governing Council to surrender their mobile phones on Wednesday, the first day of the meeting, as the policymakers were preparing to select Claudia Buch as the ECB’s top banking supervisor. The phones were returned after the announcement of Buch’s nomination as the chair of the Single Supervisory Board, which oversees major lenders in the euro zone.
The decision to confiscate phones was prompted by a similar leak in 2018, when the appointment of the current chair, Andrea Enria, was prematurely disclosed in the media before the official release. Lagarde’s move aims to prevent such incidents in the future and maintain the integrity of the ECB’s decision-making process.
When contacted for comment, an ECB spokesperson declined to provide any further information regarding the incident.
Interestingly, Lagarde’s actions followed a Reuters report that revealed the ECB’s intention to revise a key inflation forecast, potentially leading to an interest rate hike. This information, leaked a day prior to the official announcement, caused a shift in market expectations, with many economists and traders revising their predictions.
President Lagarde had expressed her disappointment over the leak at the beginning of the two-day meeting. Several colleagues echoed her criticism, emphasizing the need for a more harmonious and disciplined environment within the Governing Council.
Since assuming her role as ECB President, Lagarde has made concerted efforts to bridge the divisions within the Council, which were heightened by Draghi’s monetary policy decisions and management style. Despite the challenges, Lagarde has largely succeeded in creating a more cohesive atmosphere, partially aided by persistently high inflation over the past two years that limited dissent.
However, as borrowing costs rose, some policymakers voiced reservations about further interest rate hikes. Lagarde clarified that the recent increase was supported by a “solid majority of the governors,” compared to unanimous support for the previous hike in July.
Lagarde has actively sought to foster open communication among her colleagues. Soon after taking office in 2019, she gathered the governors at a German mountain castle, where she pledged to listen more and avoid pre-empting decisions before their input. In return, she urged governors to refrain from publicly criticizing policy decisions and to refrain from using their phones during meetings.
Last year, Lagarde introduced informal guidelines instructing colleagues to present the majority view to the public after policy decisions, while reserving “personal” views for the following Monday.
In conclusion, President Lagarde’s swift action in confiscating mobile phones highlights her commitment to curbing leaks and maintaining the confidentiality of the ECB’s decision-making process. Lagarde’s endeavors to bridge the divisions within the Governing Council have largely borne fruit, contributing to a more cohesive environment for policy discussions.
[Writing By Francesco Canepa; Editing by Mike Harrison]