Celebration of the change of office in Stuttgart, from left: Jens Weidmann, Patricia Staab, Bernhard Sibold ©Verena Müller

Patricia Staab succeeds Bernhard Sibold

Patricia Staab will assume her post as the new President of the Bundesbank’s Regional Office in Baden-Württemberg with effect from 1 October 2019. A former head of division in the Directorate General Statistics, she will succeed Bernhard Sibold, who will be retiring after a 39-year career at the Bundesbank. Speaking in front of 400 guests at an invitation-only ceremony in Stuttgart, Bundesbank President Jens Weidmann said that Mr Sibold had always been open-minded and receptive to innovation. He had always been a prudent shaper of changes, true to the motto that “there can be no improvement without change,” according to Mr Weidmann.

The Bundesbank’s sweeping structural reform beginning in the early 2000s as a necessary adaptation to the creation of the Eurosystem were one of the main radical changes that took place during Mr Sibold’s career in Stuttgart. Mr Weidmann told the audience that Mr Sibold was a driver of the Bundesbank’s transition to a modern and efficient organisation, without losing sight of the needs of the staff. Later, Mr Sibold also injected a wealth of expertise into the implementation of the Single Supervisory Mechanism. His efforts have paid off, according to Mr Weidmann: “The quality of supervision has reached a new level, and the Single Supervisory Mechanism is an important pillar of European integration.”

His successor, Patricia Staab, will inherit a very well-functioning regional office and its six branches. Mr Weidmann believes Ms Staab (47), a mathematician by training, brings essential qualities to her new role: she is an open-minded, skilled communicator who readily applies herself to her tasks and has already made a name for herself in the arena of digitalisation. As a result, she will be able to help guide the Bundesbank through the digital transformation.

Weidmann critical of ECB Governing Council decision

In addition to welcoming the incoming President and saying farewell to the outgoing President, Mr Weidmann also discussed the current downturn in economic activity and the latest ECB Governing Council decision. In this context, he pointed out the ECB projections for economic growth and inflation, which had been revised downwards: a sustainable return to an inflation rate in the target range of below, but close to, 2% is receding further into the future, he said.

Against this background, noted Mr Weidmann, the Governing Council of the ECB had further loosened the already highly accommodative monetary policy. Amongst other things, the Governing Council clearly indicated that an increase in interest rates was not to be expected for quite some time to come, and the deposit facility rate was reduced by a further 10 basis points to ‑0.5%. The Bundesbank President regarded the interest rate move as appropriate given the bleaker outlook for inflation. However, he regarded the package of measures adopted by the Governing Council as a step too far: “In this case, I am critical, in particular, of the resumption of net asset purchases, which are also intended to drive down the interest rates on long-term bonds further into negative territory.” He believes that the large-scale purchases of government bonds threaten to blur the lines between monetary policy and fiscal policy, warning that the disciplining effect of market forces would be increasingly watered down and that incentives for sound fiscal policy would diminish.