New ECB president Christine Lagarde gives her first policy speech but remains tight-lipped on monetary aspects
New ECB president Christine Lagarde just gave her first official speech on policy at an event in Frankfurt. The key messages from the speech are:
Interestingly, Lagarde warned that “a monetary union focused too much on risk sharing is likely to produce moral hazard and too little saving”. This is maybe a tribute to a mainly German-speaking audience.
Interestingly for ECB watchers, Lagarde seemed to have changed the script briefly before the speech started as the ECB first released a different speech on its website. It looks as if Lagarde added the introduction paragraph in the very last minute. Also, contrary to Mario Draghi, Lagarde went slightly off script once in a while.
Today, Lagarde’s speech was much more on the general state of Europe and the Eurozone rather than on monetary policy, following the recent tradition that central banks prefer talking about structural and fiscal policies rather than monetary policy, while politicians prefer talking about monetary policy rather than fiscal policy. For the time being, Lagarde meets the expectations that she could become the leading economic and political voice for Europe rather than quickly shaking up the ECB. Market participants will have to wait until the next ECB meeting in December to hear Christina Lagarde extensively talking about monetary policy.
Disclaimer: This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more