The former Bundesbank board member Joachim Nagel is to succeed Jens Weidmann at the helm of the German central bank. Finance Minister Christian Lindner announced yesterday on Twitter that Chancellor Olaf Scholz and he suggested the 55-year-old economist for the post: “He is an experienced person who ensures the continuity of the Bundesbank.”
The private banks welcomed the appointment. It fits “with Germany’s role as an anchor of stability in Europe,” said Christian Sewing, head of Deutsche Bank and president of the banking association. Nagel is currently working in Basel as a manager at the Bank for International Settlements (BIS). The Bundesbank’s own generation is now returning to its roots, so to speak. Born in Karlsruhe, he went through various stages of his career at the German central bank for 17 years.
Smooth transition
Nagel, who holds a doctorate in economics, sat on the board of directors for a total of six years during his long career at the Bundesbank. There he was responsible, among other things, for the important markets department, which controls the concrete implementation of monetary policy. In 2017, Nagel moved to the Kreditanstalt für Wiederaufbau (KfW) and then in 2020 to the BIZ, where he is Deputy Head of Banking.
His election should enable a smooth transition at the top of the Bundesbank if Weidmann leaves the central bank after more than ten years. “Nagel can be trusted that he will continue to carry the Deutsche Bundesbank tradition into the debates in the ECB Council without being ideologically fixated,” said economist Friedrich Heinemann.
In the past few years, Weidmann had repeatedly faced a course of confrontation with the majority opinion in the European Central Bank (ECB). This was also the case most recently, when he and two other colleagues, one of the two was the Austrian National Bank Governor Robert Holzmann, did not endorse parts of the latest resolutions in the Council. The stumbling block was the PEPP pandemic emergency program: due repayments are to be reinvested until at least the end of 2024. From the point of view of the critics, this is too long a loose line. In addition, Weidmann openly warned on another occasion that the ECB should “not ignore inflation risks and remain vigilant”.
In November, inflation in the euro zone rose to a record 4.9 percent. It has thus exceeded the ECB’s target of 2.0 percent and, according to the central bank’s forecasts, will be well above it next year as well.
Source: Nachrichten
