Weidmann Cites Thomas Becket Example for Guindos Shift to ECB

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ECB Interest-Rate Guidance ' Rather Vague', Says Bundesbank President

Jens Weidmann said there is often something of a Thomas Becket effect as politicians who become central bankers take on the mantra of their new institution.

The Bundesbank president, using a reference previously applied to him, drew a parallel to the 12th century English archbishop when asked at a press conference about Luis de Guindos. The Spanish Economy Minister is set to become the European Central Bank’s next vice president, an unprecedented move for a serving euro zone finance minister and one that’s raised eyebrows at the implications for ECB political independence.

Bundesbank President Jens Weidmann says the European Central Bank’s guidance on interest rates is “rather vague.”

(Source: Bloomberg)

“An institution always also shapes its officials,” he told reporters on Tuesday. “In a central bank, that’s an especially important effect. On the other hand, independence is solidly anchored, which certainly also plays a role in the behavior of individuals in new positions.”

The reference won’t be lost on observers of the Bundesbank president, who is himself a potential candidate for the ECB to replace its current chief, Mario Draghi. The German policy maker has been the main opponent of the expansionary stimulus driven by the central bank, a position that hasn’t sat easily in some corners of Europe.

Italian Finance Minister Pier Carlo Padoan said last week that it wasn’t a given that Weidmann will succeed Draghi. Weidmann himself declined to comment on that possibility on Tuesday.

Becket was a close friend of King Henry II, who appointed him as archbishop of Canterbury at a time of a bitter conflict with Rome. Becket became loyal to his new office and then a martyr after knights assassinated him on the supposed wishes of the king.

Weidmann said he has met Guindos several times as finance minister and “learned to appreciate him.”

“In general, a switch from politics into a central bank is nothing unusual,” said Weidmann, who was previously an adviser to German Chancellor Angela Merkel. “In the end, it depends how a person behaves once in office.”

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