Tuesday, January 03, 2012

New Appointments at the increasingly crippled ECB

UPDATE 1830 CET Telegraph reports the Belgian Peter Praet is to become Chief Economist for ECB

Bloomberg reported yesterday as follows:

Joerg Asmussen and Benoit Coeure join the ECB’s six-member Executive Board as the sovereign debt crisis enters its third year, replacing Germany’s Juergen Stark and Italy’s Lorenzo Bini Smaghi, who both departed prematurely. Asmussen, 44, was Germany’s deputy finance minister, while Coeure, 42, served as the French Treasury’s No. 2 official.

The structure at the top of the ECB is as follows (Images and explanation below from Acting Man):

The ECB's board structure. In the ECB's executive board, Lorenzo Bini-Smaghi (a noted 'dove') will be replaced by a French successor (probably a dove as well) and Jürgen Stark will be replaced by Jörg Asmussen (likely to be more pliable than Stark was) – click on image for better resolution.

The ECB has already gone quite far with its recently announced measures, specifically the 36 month LTRO's and the alteration of collateral eligibility rules. As noted before, the full effects of these interventions will only become known once the new year dawns. Should the crisis intensify, we expect that even bigger monetary pumping measures will be implemented. After all, the ECB's own survival as an institution is now at stake – if the euro area breaks apart, there will no longer be an ECB.



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