The 'shadow' ECB
At the end of 2002 the editor of the German daily Handelsblatt decided it might be an interesting idea to get together a group of leading European economists and strategists and let them shadow the European Central Bank’s decisions and actions on European monetary policy. Today that group of 18, the same number as sit on the ECB’s Executive Council, convene once a month to discuss, and probably argue about, interest rate policy.
Daniel Gros, in his ‘real’ life a director of the Brussels-based Centre for European Policy Studies, is one member of the group. He says that he enjoys the monthly conference calls with his fellow shadow ECB members. “We have a purpose to these meetings, which is to reach a decision on whether (European) interest rates should remain where they are, be raised or be cut. It is not our task to try and forecast what the ECB will do at its next meeting, but to come to a decision as to what we as a group think the ECB ought to do. For those of us present we all find it a useful forum to exchange our views and ideas and to hear and be able to challenge, first hand, differing opinions.”
And as Gros points out watching the ECB is a must for the capital markets, and there are already a wide number and variety of ECB watchers providing a much-valued function for investors and businesses alike. “If we help in this cause then that should be a good thing too. I would also that something else these meetings highlight is the very hard task facing the executive council each time it meets to hammer out its monthly interest rate decision. With 18 active participants in these meetings they have to be very organised and disciplined affairs.”