Here we go with the story.
- National bankers fault secretiveness and communication style
- Some members plan to raise concerns at governors dinner
- Draghi said to have kept key aides in the dark over policy steps
- Concerns may make it hard for eCB to take bolder steps
One of the big issues it seems is that Draghi set the balance sheet target for ABS/covered bonds straight after the governing council explicitly agreed not to make the figure public.
Communication is one concern raised by ECB sources.
“Mario is more secretive… and less collegial. The national governors sometimes feel kept in the dark, out of the loop,” said one veteran ECB insider. “Jean-Claude used to consult and communicate more,” another ECB source said. “He worked a lot to build consensus.”
Mario Draghi is losing support at the ECB
The news has sent European stocks and bond yields lower while the euro jumps to 1.2562. Any challenge of Draghi’s leadership is going to have the market worried that there could be a shift in policy reversing or taking expected policy tools off of the table. While that may mean a lack of further easing (bullish for the euro short term) the bigger fear to watch is what do they replace it with and will removing their actions hurt the economy even more? That’s a longer term negative for the euro if that comes to fruition.
Full story from RTRS here
