Mario Draghi has changed the culture at the European Central Bank (ECB). He has accomplished policy actions such as intervening in the markets that would have been unthinkable only a few years ago.
The ECB has become a more proactive central bank as a result. He has overhauled the bank’s policies, the way it interacts with governments, and its management style.
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His mission is to secure the euro and to foster a tight-knit currency union. Jean-Claude Trichet, the previous ECB president, tried to be more German than the Germans. He stuck vehemently to the German focus of fighting inflation.
Draghi’s focus on keeping the euro together has earned him the suspicion of the Germans. They are afraid he is abandoning more stable policies in favor of a fast and loose approach to central banking.
And instead of managers feeding information up to the board, Draghi insists they make decisions themselves.
Instead of holding with tradition and awarding the economics portfolio to the Germans, Draghi listened to the wishes of his new board and then divided the various ECB portfolios based on each board member’s strengths.
The ECB portfolios include Market Operations, Economics, and International Relation. His comments in August of 2012 declaring the ECB would do whatever was necessary to save the euro, Draghi proved he had increased the power of ECB communications.
His new way of management lets him focus on monetary policy and shaping the future of the euro.
Since he took office the ECB has cut interest rates three times, funneled over €1 trillion to banks in low-cost, three-year loans, and instigated a bond-purchase program that has restored confidence to the markets.
And even though the Germans are not completely happy with his accomplishments, Draghi has succeeded in establishing good working relationships with all leaders in the bloc.
His next task is to spearhead supervision of the unification of Europe’s banks and not to let that job interfere with delivering stable prices
through its monetary policies.