Germany seeks to assert its control of ECB
THE timing of Deutsche Bank boss Josef Ackermann's revelation that his bank, Germany's largest commercial lender, had not accepted any funds under the ECB's three-year loan programme for eurozone banks, is interesting to say the least.
Coming just a day after Bundesbank boss Jens Weidmann revealed that he had opposed the ECB's latest moves to extend the collateral it would accept from eurozone banks, is Germany trying to rein in ECB president Mario Draghi?
Mr Ackermann's statement prompted a furious response from Mr Draghi who criticised certain unnamed bankers for making what he described as "virility statements". For bankers this is pretty serious, real handbags at dawn stuff!
Since taking over as ECB president three months ago Mr Draghi has pursued a policy of what might best be described as quantitative easing by stealth.
In December the ECB lent €489bn to eurozone banks and last Thursday the ECB further relaxed its collateral requirements for the next tranche of three-year loans at the end of this month.
Mr Draghi was forced to concede that the ECB council decision to do so was not a unanimous one. So what's going on?
Mr Ackermann's refusal to accept funds could be explained away by self-interest -- the yield on three-year German government bonds currently stands at just 0.42 per cent meaning that Deutsche would lose money if it borrowed from the ECB at one per cent. But coming hot on the heels of Mr Weidmann's intervention, it's difficult to resist the suspicion that having lost control of the council, Germany is resorting to other tactics to regain the upper hand at the ECB.
