President Klaas Knot of De Nederlandsche Bank (DNB) has no regrets about his recent criticism of the monetary policy of the European Central Bank (ECB). Knot says he deliberately chose to issue a statement shortly after the interest rate decision in September to clearly state his position.
In that statement, Knot openly questioned the effectiveness of the ECB's measures to boost the eurozone economy. He also stated that the measures were disproportionate to the current economic circumstances.
Besides Knot, German central banker Jens Weidmann also expressed criticism of the ECB’s direction. Their reactions caused a stir in the financial world. The asset purchase decision was ECB President Draghi’s last decision before his retirement date.
On Thursday morning, the Financial Times revealed that the ECB’s decision to restart the asset purchase program after nine months went against the advice of the central bank’s monetary policy committee. That committee did not believe the monetary easing was very meaningful because interest rates were already at unprecedentedly low levels.
Others argue, however, that the finance ministers are trying with their open criticism to gain more influence over the (currently autonomous) policy of the ECB. Soon Christine Lagarde will take over from ECB President Mario Draghi.
The Dutch central bank director Knot thinks there will be a need to revise the central bank’s strategy. “Everyone is convinced of that,” Knot said.