buiter51_Andreas RentzGetty Images_lagarde Andreas Rentz/Getty Images

The ECB Should Change Three Bad Habits

There are three main reasons for the European Central Bank's excessive inertia in the facing of changing economic circumstances, and all relate to its internal decision-making process. Fortunately, that means the problem that has plagued it in recent years is fixable from within.

NEW YORK – The European Central Bank too often finds itself “behind the curve” of events, and we believe the blame lies with its decision-making process, rather than its institutional setup or personnel. As ECB President Christine Lagarde revealed at the December 14, 2023, press conference, “We did not discuss rate cuts at all… between hike and cut, there’s a whole plateau, a whole beach of hold.”