German cbank chief to step down after 10 yrs

The head of Germany’s central bank announced Wednesday that he will step down after a decade at the helm, removing a key hawkish voice from the European Central Bank’s governing council.

A statement from the Bundesbank said Jens Weidmann will leave office at the end of the year for personal reasons. National central bank governors in the 19-country eurozone have a seat on the ECB’s governing council, and in that position, Weidmann has been the chief skeptic of expansive stimulus policies, such as bond purchases.

“I have come to the conclusion that more than 10 years is a good measure of time to turn over a new leaf - for the Bundesbank, but also for me personally,” Weidmann said in a letter to the bank’s staff.

While he has only one vote on the 25-member governing council, his voice has been amplified because he comes from the largest eurozone economy. He has tended to urge restraint in measures that involve buying government bonds of member states, a step the European Central Bank has undertaken to drive down long-term interest rates and support growth.

“This comes at a crucial time for the ECB. The camp of the hawks is losing an important voice,” Carsten Brzeski, an economist at ING in Frankfurt, said in a research note.

Prospects of higher inflation, “herd immunity and an economy returning to pre-crisis levels before the end of the year are creating a strong argument to withdraw the ECB’s emergency stimulus and start reducing asset purchases,” Brzeski added. “Maybe the decision to do the latter will be Weidmann’s last success as Bundesbank president at the ECB’s December meeting.” (AP)