What stands out about the ECB board photos?

'A picture is worth a 1.000 words' is an old saying. I was reminded of this when I recently saw a photo of the last 'hut on the moor' session of the board of the European Central Bank (ECB) in the German newspaper Frankfurter Allgemeine Zeitung. They all stood there smiling and neat. But close to 1,5 meters away from each other.   

During their outing, the members discussed the bank's policy and strategy. As is well known, central bankers are usually divided into 2 groups: the hawks and the doves. The first group consists of central bankers who are somewhat stricter than the pigeons, who always and everywhere see sufficient reason to lower or keep interest rates low. 

Within the ECB, especially the Dutchman Klaas Knot and the German Jens Weidmann are known as hawks, with President Christine Lagarde and the second man of the bank, Luis de Guindos, as the main pigeons. Since they are president and vice president, they are naturally front and center. Klaas Knot is all the way in the back and Jens Weidmann can be found so far left that he still fits in the photo.

Length also determines
Coincidence or not, the hawks can be found on the edges of the photo (with the Austrian central banker, also a hawk, in the back right). 'The fact that Knot is all the way in the back is, of course, due to his height. Tall people just don't come first', I can already hear you thinking. Once, that's what I thought too. Doesn't explain getting rid of Weidmann to the brink, but okay.  

That is why I also went to look at 2 other photos of the board. The first is the official photo that can be found on the bank's website (see photo above). Knot can also be found at the very back, together with the considerably smaller Weidmann. The top man of the Spanish central bank, with a Knot-like height, is pontifically in the front row (and just doesn't block the little Yves Mersch from Luxembourg, also a hawk, who has since retired).  

In the back of the room
The second photo I've come up with is one taken during the first cabin-on-the-moor session after Lagarde became ECB president. All board members sit behind one large table in a castle in the mountains near Frankfurt. Knot, Mersch and Weidman can be seen in the photo at the very front! So you think: 'See you.' But then I take a closer look at the photo. Knot, Mersch and Weidmann are not at the front at all in the photo, they are at the very back.

The photo was taken from the back of the room. The large opening entrance doors at the very back of the photo betray that. Who's closest to that door? Lagarde, with the Spanish central banker next to her. Knot and Mersch couldn't be further away than they are in the photo.  

Stretching price stability further
By the way, did I mention that during the latest heath session, the board reportedly decided to stretch the definition of price stability further – something a hawk is against. So far that keeping the official interest rate at 0% could take so long that I can't say with certainty which will come sooner: the World Cup in North America in 2026 or the ECB's first rate hike? Those pictures of the ECB say more than 1.000 words to me.  

Edin Mujagic

Edin Mujagić is an economist and manager at Beleggingsfonds Hoofbosch. He focuses on global central banks, and in his blogs he writes mainly about developments in interest rates and inflation. He has also written several books.

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