Letter from the President to Bundesbank staff
In recent years, I have repeatedly addressed you personally. I would like to do so again today.
The time since I took over as President of the Bundesbank has been eventful. The environment in which we operate has changed massively and the Bundesbank's tasks have grown. The financial crisis, the sovereign debt crisis and most recently the pandemic have led to decisions in politics and monetary policy that will have long-lasting effects.
It has always been important to me that the Bundesbank's clear, stability-oriented voice remains clearly audible. With a great deal of expertise, the departments have contributed to the discussions on the right lessons to be learned from the crisis and on the framework of the monetary union. Important regulatory changes have been adopted. The reorganisation of banking supervision in Europe has not only led to completely new supervisory structures at the ECB, but also to a strengthened role for the Bundesbank. The Bundesbank's new responsibilities in the area of financial stability also underline our central role when it comes to a functioning financial system.
Monetary policy has played a significant, stabilising role throughout this period. However, the numerous emergency monetary policy measures were also associated with considerable side effects and in the ongoing crisis mode, the coordinate system of monetary policy was shifted.
My colleagues in the Governing Council under the leadership of Christine Lagarde deserve thanks for the open and constructive atmosphere in the sometimes difficult discussions of the past years. Despite the strains caused by the pandemic, we managed to bring the strategy review as an important milestone in European monetary policy to a successful conclusion. As the Bundesbank, we confidently contributed with our analytical competence as well as our core convictions to the review process. A symmetrical, clearer inflation target has been agreed. Side effects and, in particular, financial stability risks are to be given greater attention. A targeted overshooting of the inflation rate was rejected. And the Eurosystem will pay more attention to climate risks in the future. These are all points that were important to me.
As is so often the case, it now depends on how this strategy is "lived" through concrete monetary policy decisions. In this context, it will be crucial not to look one-sidedly at deflationary risks, but not to lose sight of prospective inflationary dangers either. And crisis measures with their extraordinary flexibility are only proportionate in the emergency situation for which they were created. A stability-oriented monetary policy will only be possible in the long run if the framework of the monetary union ensures the unity of action and liability, monetary policy respects its narrow mandate and does not get caught in the wake of fiscal policy or the financial markets. This remains my firm personal conviction, as does the high importance of the independence of monetary policy.
At the same time, the Bank has transformed itself internally. Together, we have created a culture of openness in which we treat each other with esteem and respect, regardless of whether we work at the head office, the regional offices, or the branches. All my colleagues on the Executive Board have helped to shape this path, and I would like to express my special thanks to them. It has always been important to me that we perceive ourselves as "one bank", which can only carry out its important tasks well if all parts contribute their share and are heard. And I believe we have made good progress in this respect.
Our public relations work has also changed: in recent years, the Bundesbank has presented itself as a transparent, accessible and, above all, competent institution that people can trust. This has been demonstrated by the "open days" and by the numerous other public events. Through the digitalisation initiative and the work of KADi, the Bank has become more agile and flexible at the same time, and not only here, we work better together across departments. Other projects were only started and pre-shadowed during this time, but not completed. This applies to the new campus and the "new working environments" as well as to the digital euro project.
I am writing all this to you because I am convinced that together we have achieved a lot in the past years, and I would like to thank you for it. Thank you for supporting the Bank's transformation towards more openness and appreciative cooperation. Thank you for contributing your expertise, your ideas and your lifetime to our internal discussions, the committee work in the Eurosystem and the public image of the Bank -- even under the difficult conditions of the pandemic.
Over all these years, it has been an honour and a matter close to my heart to represent the Bundesbank as an institution - and thus all of you - and to shape the Bank's positions together with you in the interest of a stable currency, a stable financial system, stable payment systems and a secure cash supply. I know of no other institution where so much expertise meets so much commitment to the manifold important public tasks.
This makes the decision to ask the Federal President for my release from office on 31 December 2021 all the more difficult. But I have come to the conclusion that more than 10 years is a good measure of time to turn over a new leaf - for the Bundesbank, but also for me personally.
I wish you continued determination, fortune, but also satisfaction in your important tasks. Remain an audible voice of reason in public discussions and preserve the Bundesbank's important stability policy legacy, which makes this institution so unique. At the same time, I hope that you will remain fond of me and try to understand my decision.
With warmest regards