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Banking industry

Ernst Welteke Nominated as Bundesbank President

Strategic Insights

— 1 min read

German bankers and businessmen are celebrating the announcement of Ernst Welteke as the Bundesbank's next president, succeeding Hans Tietmeyer who retires in August. Welteke, 56, currently runs the central bank in Hesse, one of Germany's 16 federal states, and has a background in politics, which may serve him well as he prepares the Bundesbank for an era of change without precedent in its 50-year history. As the ECB grows into its task, Welteke plans to adapt the Bundesbank, suggesting that national central banks should focus on specific themes, such as the Austrians on eastern Europe and the Bundesbank on international financial markets.

Key Takeaways:

  • Ernst Welteke, born in 1942, has a background in politics and has spent many months thinking about the role of the Bundesbank in the era of the European Central Bank (ECB).
  • Welteke believes that national central banks should focus on specific themes, rather than analyzing everything, and suggests that the Bundesbank could focus on international financial markets.
  • With 16,000 employees, the Bundesbank will need to be trimmed down once euro banknotes and cash replace national currencies in 2002.
  • Welteke promises that staff cuts will be carefully planned and sensitively implemented.
  • As a former minister in the Social Democrat-Green coalition, Welteke is close to Germany's new SPD finance minister, Hans Eichel.
  • Welteke's views on monetary policy are firmly within the Bundesbank tradition of anti-inflationary rectitude.
  • He believes the euro's weakness against the dollar this year has been due to US economic strength and is sceptical about the effectiveness of central bank interventions on currency markets.

Statistics:

  • The Bundesbank has 16,000 employees, more than twice the number at the ECB.
  • Herman Welteke is 56 years old.
  • The euro-zone GDP is one-third accounted for by Germany.
  • The Bundesbank is one of Germany's 16 federal states.
  • The ECB's Governing Council has 17 members.

Sources:

  • The Financial Times, 1999.

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