Wearing an owl brooch to her January press conference, Christine Lagarde made clear her determination to run the European Central Bank differently from her predecessors as it hunts for a way out of crisis-management mode.
“I’m neither dove nor hawk, and my ambition is to be this owl that is often associated with a little bit of wisdom,” the bank’s first female president told reporters the previous month.
Central bank watchers have long resorted to ornithological categories to sort policymakers.
Those favouring generous support to the economy are dubbed “doves” and those backing tough love “hawks”.
The battle lines have been drawn especially clearly over the ECB’s 21-year history, as the euro single currency brings together countries with vastly different economic histories and cultural foibles around money.
Lagarde took over after a turbulent few months for the Frankfurt institution and her chief aim for her first 100 days in office — a milestone she reached Saturday — was to smooth the divisions and avoid any upsets on her own account.
By the end of 2019, predecessor Mario Draghi’s repeated salvos of unprecedented stimulus measures to buttress the flagging eurozone had divided members of the ECB’s governing council like never before.
Doves believe the Italian economist’s generous doses of medicine helped the eurozone survive years of struggles after the 2008 financial crisis.
Meanwhile, hawks accused him of having taken the central bank far beyond the limits of its treaty mandate to maintain price stability and having encouraged reckless borrowing by governments.
Among Lagarde’s first acts on taking office in November was to whisk the whole governing council to a conciliatory “retreat” at a plush hotel outside Frankfurt.
She aims to “show she’s listening to others’ arguments, rather than imposing her own views on them right from the beginning,” said Eric Dor of France’s IESEG business school.
“I would have preferred her to emerge from her predecessor’s shadow more” rather than maintaining Draghi’s policies for now, said Markus Ferber, a German conservative in the European Parliament.
With the ECB forecasting a gradual pickup in growth and inflation, Lagarde “will be judged on how successfully she is able to manage what is likely to be a slow process of monetary policy normalisation,” said Nomura economist George Buckley.
The bank will eventually have to wind down its “quantitative easing” bond-buying programme, which has so far pumped almost 2.7 trillion euros ($3.0 trillion) into the financial system.
At the same time, Lagarde has launched a year-long rethink of the ECB’s monetary policy tools and goals.
Observers expect to see the central bank add flexibility to its just-below-two-percent inflation target.
And Lagarde’s promise to include climate considerations in monetary policy has set traditionalists’ teeth on edge.
In the near term, she will have to address the risks posed by the novel coronavirus outbreak to the eurozone economy in a possible first major test.
So far, Lagarde has “spent more time dealing with politics than monetary policy,” said Frederik Ducrozet of Pictet Wealth Management.
In photos on her Twitter and Instagram accounts, the former French finance minister and International Monetary Fund chief likes showing herself in the company of important decision makers.
She has taken particular care in Germany, where Draghi’s disinterest in making friends made the pill of low or zero interest rates on cherished savings accounts all the more bitter.
Living in a hotel room while apartment-hunting, Lagarde has looked to integrate in Frankfurt by appearing alongside the mayor to eat the local “Green Sauce” speciality at a new year event.
People close to the ECB chief say she attends the opera, visited a Van Gogh exhibition when her husband visited from Marseille, and that she enjoys walks along Frankfurt’s Main river.
She has also looked to anchor herself among the ECB’s multinational staff, eating occasionally in the canteen or playing table tennis with disabled employees at a diversity event.
But she also appears concerned with keeping a grip on internal communication.
“There’s talk of getting rid of anonymous posts on an intranet forum for the staff,” limiting room for criticism, one ECB insider who asked not to be named said.
“No one will say anything if anonymity is removed,” the person complained.