Bloomberg reports that when Mario Draghi becomes the Head of the European Central Bank in November he will be taking a 50% pay cut.
Draghi's pay at the Bamca d'Italia was €758,000, which in dollar terms is more than five times what the Chairman of the Federal Reserve Bank of America gets.
Showing posts with label ECB. Show all posts
Showing posts with label ECB. Show all posts
04 June, 2011
11 May, 2010
The Euro: Dirty Harry Trichet
I'm not a great fan of the near $1 trillion 'shock and awe' rescue package of the euro, given that it was more of a rescue for the banks than for the member countries, and that all it does is buy time, rather than address the fundamental problems.
But I did enjoy this, from Daniel W Drezner in Foreign Policy
"I know what you're thinking. Is this my last rescue package, or do I have another source of credit in reserve? Well, to tell the truth, in all this excitement I kinda lost track myself. But being this is a €720bn rescue package, the most powerful one in the world, and would wipe away any short position you've taken in the past week, you've got to ask yourself one question. 'Do I feel lucky?' Well do you, punk?"
We'll see. In my experience the markets get satisfied and warm for a bit, then a bit itchy, then a bit have-a-go.
But maybe they'll turn on Britain first.
But I did enjoy this, from Daniel W Drezner in Foreign Policy
"I know what you're thinking. Is this my last rescue package, or do I have another source of credit in reserve? Well, to tell the truth, in all this excitement I kinda lost track myself. But being this is a €720bn rescue package, the most powerful one in the world, and would wipe away any short position you've taken in the past week, you've got to ask yourself one question. 'Do I feel lucky?' Well do you, punk?"
We'll see. In my experience the markets get satisfied and warm for a bit, then a bit itchy, then a bit have-a-go.
But maybe they'll turn on Britain first.
04 May, 2010
L'odeur d'un rat
When the European Central Bank was set up in 1998 they chose as their President a rather well regarded Dutchman called Wim Duisenberg. The key to the job was that the ECB should be apolitical and indeed stand up to the politicians in defence of the currency.
The French, however, argued that since the bank was in Frankfurt the President should be French and after much whining and dining got their way, as the French always seem to. Mr Duisenberg had to step down before the end of his mandate, in 2003, and the French parachuted in their man, Jean Claude Trichet.
Interestingly enough the verb tricher in French means to cheat.
At the time M. Trichet was accused of being involved in a massive fraud case involving some missing money at the bank Credit Lyonnais. He got off and took the first plane to Frankfurt.
Fast forward seven years. The European Central Bank has a liquidity window. It allows European banks to borrow from it against the security of European Government bonds. The restriction is that the bonds have to be rated as investment grade. Those of Greece, for example, would not be acceptable.
But now they are. Trichet has announced a sudden U-turn. Now every country which spends and borrows too much is going to press for the same treatment: sign the piles of IOUs, sell them to the banks, and the banks lodge them at the ECB in return for clean, fresh euros. The next stage, not ruled out by the ECB, will be to purchase Greek bonds outright.
The Financial Times said ‘Mr Trichet has taken an increasingly political stance..’
This is effectively a blanket guarantee and Angela Merkel should have forbidden it but she can’t because the ECB is non political.
Strangely enough this is all happening while the IMF is having a good run. Dominique Strauss Kahn and his boys rejected outright the terms of the European rescue plan for Greece describing growth projections as optimistic. Mr Strauss Kahn is expected to be Mr Sarkozy’s rival in the Presidential Elections.
The French, however, argued that since the bank was in Frankfurt the President should be French and after much whining and dining got their way, as the French always seem to. Mr Duisenberg had to step down before the end of his mandate, in 2003, and the French parachuted in their man, Jean Claude Trichet.
Interestingly enough the verb tricher in French means to cheat.
At the time M. Trichet was accused of being involved in a massive fraud case involving some missing money at the bank Credit Lyonnais. He got off and took the first plane to Frankfurt.
Fast forward seven years. The European Central Bank has a liquidity window. It allows European banks to borrow from it against the security of European Government bonds. The restriction is that the bonds have to be rated as investment grade. Those of Greece, for example, would not be acceptable.
But now they are. Trichet has announced a sudden U-turn. Now every country which spends and borrows too much is going to press for the same treatment: sign the piles of IOUs, sell them to the banks, and the banks lodge them at the ECB in return for clean, fresh euros. The next stage, not ruled out by the ECB, will be to purchase Greek bonds outright.
The Financial Times said ‘Mr Trichet has taken an increasingly political stance..’
This is effectively a blanket guarantee and Angela Merkel should have forbidden it but she can’t because the ECB is non political.
Strangely enough this is all happening while the IMF is having a good run. Dominique Strauss Kahn and his boys rejected outright the terms of the European rescue plan for Greece describing growth projections as optimistic. Mr Strauss Kahn is expected to be Mr Sarkozy’s rival in the Presidential Elections.
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