On Monday 2 December, during her first monetary dialogue in the European Parliament, the new President of the European Central Bank, Christine Lagarde, asked MEPs to bear with her as she gears up for her new role.
In addition to the observed slowdown in growth, which is weighing on inflation, Mrs Lagarde specifically mentioned the forthcoming strategy review of monetary policy that the Frankfurt Institute will start, 16 years after the last review. While she refused to venture into the scope of this review and the expected timetable, she promised that this exercise would be conducted “with thorough analysis” and “an open mind”, including through broad stakeholder consultation.
Asked by Stéphanie Yon-Courtin (Renew Europe, France), the former managing director of the IMF said that the issue of climate change should be included in the strategic review of monetary policy.
Noting that the ECB’s primary mandate is price stability, Mrs Lagarde also stated that the climate issue could very well be included in the "secondary objectives” that influence the economic decisions taken by the European institutions.
In its view, the ECB could integrate this climate challenge into the models used to prepare its macroeconomic forecasts. And, as part of its prudential functions, the single banking supervisor could, through transparency requirements, determine whether banks are taking climate change into account in their investment policies.
It would also be “legitimate” for the ECB to look at how it carries out market interventions with a careful eye on climate change, Lagarde said. For example, the monetary institute already has a policy to promote green investments in the management of its investment portfolio related to the pension scheme for its former agents.
Mrs Yon-Courtin also asked the president of the ECB about the place of women in financial organisations.
“It’s a fight I’ve been fighting for a long time”, replied Mrs Lagarde. “Today, the Governing Council is composed of 25 people, including 24 gentlemen. This is not a normal representation of our society. It is natural for it to evolve”, she said.
Mrs Lagarde advised MEPs to put pressure on national authorities to appoint women, and she welcomed the idea of introducing a rule requiring the nomination of two candidates, one male and one female, when senior European positions become available.
“But not tomorrow, because I don’t want to be alone” on the Governing Council, she joked, while MEPs will interview Isabel Schnabel of Germany and Fabio Panetta of Italy, candidates for two vacant posts in the ECB’s governing body, on Tuesday. (Original version in French by Mathieu Bion)