## ECB President Seizes Mobile Phones of Policymakers to Prevent Leaks
European Central Bank (ECB) President Christine Lagarde has taken an unprecedented step to curb the leakage of information from the Governing Council. According to two anonymous sources, Lagarde confiscated the mobile phones of her fellow policymakers during this week’s meeting. She also reprimanded them for leaking critical information prior to a policy decision. This drastic action is the most assertive measure Lagarde has implemented to mitigate information leaks from the Governing Council, a problem that has persisted throughout her tenure and that of her predecessor, Mario Draghi.
## Policymakers’ Phones Confiscated Before Buch’s Nomination
The 26 members of the Governing Council were instructed to surrender their mobile phones on Wednesday, the first day of the meeting. This directive came as policymakers were about to nominate Claudia Buch as the ECB’s top banking supervisor. The phones were returned after Buch’s nomination as chair of the Single Supervisory Board, which supervises over a hundred of the euro zone’s largest lenders, was announced. This measure was taken due to the premature media exposure of the current chair, Andrea Enria, before the official announcement in 2018.
## Lagarde Rebukes Leak of Inflation Forecast
Lagarde’s move came a day after Reuters exclusively revealed that the ECB would raise a key inflation forecast this week. This forecast led to an interest rate hike on Thursday. Many economists and traders, who initially expected the ECB to maintain rates, changed their view after the Reuters report was published late on Tuesday. Lagarde condemned the leak at the start of the two-day meeting, and her criticism was echoed by several colleagues.
## Creating Harmony Amid Divisions
Lagarde inherited a divided Governing Council from Draghi, who alienated the so-called hawks in the euro zone’s north with his ultra-easy monetary policy and abrasive management style. She has steadily tried to foster a more harmonious atmosphere, and several sources agree she has largely succeeded. Ironically, high inflation over the past two years has aided her efforts by reducing room for dissent and forcing the ECB to embark on a series of interest rate hikes.
Lagarde has spared no effort in trying to win over her colleagues. Early in her term in 2019, she gathered them at a German mountain castle where she pledged to spend more time listening and not to pre-empt decisions before policymakers had weighed in. In return, she asked governors to stop criticizing policy decisions once taken, keep internal disputes out of the media, and put their phones away while colleagues were speaking. She also set informal guidelines instructing colleagues to present the majority view to the public after the ECB’s policy decisions, which are published on Thursdays, and hold back “personal” views until the following Monday.
Original Story at www.reuters.com – 2023-09-16 14:16:00
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