Willem Duisenberg: consensus builder
The European Central Bank under president Wim Duisenberg has proven remarkably flexible on monetary policy. Modelled on Germany's Bundesbank, most of the 17 members of its interest rate-setting governing council were inculcated with that institution's hard-money philosophy. But not all of them.
Among the least Bundesbank-like on the council are bankers from Spain and Finland. One of their most significant victories has been the ECB's decision to use a variety of inflation indicators rather than rely on money-supply figures. They have also introduced a spirit of compromise in interest-rate policy the Bundesbank would have frowned upon.
For example, in December, before the ECB was even officially in charge of eurozone monetary policy, Duisenberg, with key support from French central bank governor Jean-Claude Trichet and Bundesbank president Hans Tietmeyer, convinced fellow ECB council members to institute coordinated rate cuts. These lowered the floor for eurozone interest rate convergence from an expected 3.25% to 3% and gave a much needed fillip to the core economies of Germany, France and Italy. This was approved even with European-wide money supply growth in excess of the Bundesbank's targets and those of most other European banks.