INSUBCONTINENT EXCLUSIVE:
objectives has galvanized the race to succeed Mario Draghi.
The ECB president steps down at the end of October and Rehn, governor of the
Bank of Finland, is a contender to replace him
The Finn knows plenty about politics: He has been a lawmaker and finance minister at home, and a two-time European Commissioner, including
during the euro zone debt crisis when he was in charge of economic and monetary affairs.
Putting campaigning to one side, asking whether the
ECB should revamp its targets and operations is an interesting question, albeit a tricky one
Investors might try to secondguess what result the ECB has in mind, such thinking goes, and that would impact the currency and bond
consider a fresh approach
The US Federal Reserve has just embarked on a similar exercise, which will report back in the first half of 2020
The Fed is still the most important central bank in the world, so it makes sense for the ECB to make a move after its sees what the
Americans choose to do.
Unlike the ECB, whose mandate is primarily to maintain price stability, the Fed has dual objectives that also
include the delivery of maximum employment
These are set by the US Congress and, as such, are excluded from the review
But the Fed may decide there are better ways to meet its 2 per cent inflation target, including changing the way it communicates its
thinking.
Regardless of what the Fed does, a policy change might help the ECB to answer those critics who say it has run out of weapons to
fight the next recession.
