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Bundesbank chief stands up to finance minister

The Local · 18 Sep 2012, 15:11

Published: 18 Sep 2012 15:11 GMT+02:00

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Central bankers have a duty to speak out, Weidmann said Tuesday, adding that openness and transparency were important pre-requisites for confidence in a currency and its central bank.

Weidmann,who as Bundesbank chief sits on the ECB's policy-setting governing council, told a bank colloquium it was "important for confidence that central bankers, who administer a public good, also publicly justify themselves."

He had come under fire over the weekend for being openly critical of the ECB's schemes to buy up the sovereign bonds of debt-wracked countries in order to help bring down their borrowing costs.

On Sunday Schäuble told the Frankfurter Allgemeine Zeitung (FAZ) newspaper that public critiques from Weidmann could hurt confidence in the ECB.

"People are very much confused and the central banks are fundamentally the institutions which should reassure the citizens," he said.

Weidmann voted against a revamped bond purchase scheme known as OMT or Outright Monetary Transactions unveiled earlier this month by European Central Bank head Mario Draghi.

Schäuble was opposed to publicly admitting there was a conflict in the ECB governing council, according to the FAZ.

"I don't see any conflict between Draghi and Weidmann," he said during a Frankfurt conference the first week of September.

Story continues below…

Weidmann has maintained that the ECB is overstepping its mandate and that its bond buying scheme is tantamount to monetary financing or simply switching on the printing press to print the banknotes to pay for a country's debts.

The Local /sh

The Local (news@thelocal.de)

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Your comments about this article

19:05 September 18, 2012 by IchBinKönig
is there some truth @ theLocal.de today??? Amazing.
20:52 September 18, 2012 by sonriete
Let me get this straight. Schauble feels free to give interviews to FAZ and Spiegel whenever he feels like it.

He feels free in those interviews to speak on behalf of Weidmann and declare that there is no difference of opinion between Draghi and Weidmann.

At precisely the same time he admonishes Weidmann for giving interviews. Hmmm, are we then to believe Weidmann is lying when he states in interviews there are serious differences between himself and Draghi?

Or are we to believe Shauble, when he presumes to say there are no differences at all.

Can they both be right?

And who gave Schauble the right to explain the views of Weidmann, views Weidmann himself contradicts.

Did Schauble get this permission from Weidmann's mother? If not her, who else can grant Schauble such permissions?

Just wondering.
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