From 1990 to 1998, Otmar Issing served as the Bundesbank’s chief economist before becoming the first chief economist of the European Central Bank. There, he played a central role in shaping the monetary policy strategy of the ECB Governing Council. Speaking at a colloquium marking Issing’s 90th birthday, Bundesbank President Joachim Nagel underscored Issing’s enduring influence: You took the Bundesbank’s tradition of independence and made it Europe’s, Nagel said, noting that both the Bundesbank and the Eurosystem continue to benefit from his legacy. Issing’s long-standing colleagues former Bundesbank President Axel Weber, former Governor of the Bank of England Sir Mervyn King and ECB President Christine Lagarde paid their respects at the event, which was moderated by financial specialist and long-time associate David Marsh. 

Independence as a cornerstone

According to Nagel, Issing’s defining contribution was making a convincing case that central bank independence is a necessity for price stability. Drawing on both economic theory and empirical research, he explained that insulating monetary policy from political pressure is essential for maintaining low and stable inflation. However, independence must go beyond legal frameworks: it also requires committed leadership and broad support from society.

Nagel echoed Issing’s long-held view that independence is necessary, but not sufficient, for price stability. He noted that recent research continues to confirm the link between independence and lower inflation, whilst also highlighting the risks when political interference undermines a central bank’s credibility. To this day, the Bundesbank values Issing’s contribution to monetary stability.

A legacy beyond policy

Concluding his remarks, Nagel underlined the continued relevance of Issing’s work. He has been a watchful observer of the central banking world for more than 60 years,” he said. “And he regularly stands up for central bank independence. 

In 2006, at the age of 70, Otmar Issing retired from the ECB after the end of his eight-year term as chief economist. He then led the Center for Financial Studies in Frankfurt and served as an international advisor for a US investment bank. He is married and has two children.