(European Central Bank head Mario) Draghi Gets Powers to Rival Bernanke

CNBC ^ | Published: Tuesday, 3 Jul 2012 | 2:39 AM ET | (Via NYT)

[Olog-hai]

The spotlight in the European debt crisis has now shifted decisively toward the influential leader of the European Central Bank, Mario Draghi, who emerged from the recent summit meeting in Brussels with new powers and stronger backing to address the Continent’s financial woes.

Political leaders took significant strides toward making the central bank more like the United States Federal Reserve, giving it authority to oversee the eurozone’s largest banks and, once that new regulator is in place as soon as the end of this year, a likely role in rescuing Spanish banks with capital directly from the European rescue funds.

Many of the longer-run plans under discussion, like European deposit insurance, would mean shifting further responsibilities toward the bank, arguably giving Mr. Draghi the most influential executive powers in Europe.

“In terms of unelected people, he is by far the most powerful in the democratic world,” said Franklin Allen, a professor of finance and economics at the University of Pennsylvania’s Wharton School. “He’s going to have huge influence over bank supervision and over the purchase of sovereign debt, whether he’s the head of the committees in charge or not.” …

One thing is certain: The financial and monetary integration in Europe continues to outpace the deepening of political and fiscal ties, risking an angry reaction from German taxpayers who could find themselves on the hook for more and more liabilities. A German constitutional court is wary of allowing too much latitude to Mr. Draghi and other European officials, threatening to strike down steps that violate Germany’s Basic Law.

But for now, Mr. Draghi’s already significant influence seems only to have grown. One official who works closely with Mr. Draghi said he still enjoyed the support of Germany’s chancellor, Angela Merkel, who understood well his carrot-and-stick method. …

[txrefugee]

We can all relax now. We know how well that’s worked in the USA.

[OldEarlGray]

I thought the "antichrist" would be taller.

 

[Sirius Lee]

The Germans have been able to compensate for the ills of socialism with their superior manufacturing and technology but now they're about to find out the true costs of welfarism.

If you lie down with dogs...