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Bundesbank chief stands up to finance minister

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Bundesbank chief stands up to finance minister
Photo: DPA
15:11 CEST+02:00
German central bank chief Jens Weidmann defended his criticism of the European Central Bank's latest anti-crisis strategy after a tongue-lashing from Finance Minister Wolfgang Schäuble.

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.

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.

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