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According to the Handelsblatt newspaper and a government source, Germany’s new government will appoint Joachim Nagel, a career banker with ties to the ruling Social Democratic party, as the next Bundesbank chief.
Nagel, a former member of the Bundesbank’s board of directors, will succeed Jens Weidmann, who stepped down five years early following a decade of futile opposition to the European Central Bank’s strong stimulus program of sub-zero interest rates and large bond purchases.
Chancellor Olaf Scholz could formally announce the nomination later this week, according to Handelsblatt. The 55 year-old economist will take over at a critical juncture in the country’s history.
Inflation is well above the ECB’s target of 2%, and competing parties within the Governing Council have sharply divergent views on how it will likely evolve.
Nagel is currently working with the Bank for International Settlements. He previously served on the board of the state-owned development bank KfW Bank.
Although he hasn’t spoken publicly about monetary policy in years, statements he gave as a member of the Bundesbank board of directors between 2010 and 2016 reveal he supported the German central bank’s harsh stance on inflation and stress on market discipline for banks and governments.
As head of the Bundesbank, Nagel would be one of two Germans on the ECB’s Governing Council, with Isabel Schnabel.
Story by : Norvisi Mawunyegah