ECB board member resigns amid stimulus tensions

[FRANKFURT AM MAIN] The European Central Bank said on Wednesday that Sabine Lautenschlaeger would resign from its executive board at the end of October, amid tensions over its president Mario Draghi's extraordinary stimulus measures.

Ms Lautenschlaeger, who is German and widely seen as a "hawk" opposed to monetary easing, told Mr Draghi that she would "resign from her position on 31 October 2019, prior to the end of her term of office", the ECB said in a statement.

Ms Lautenschlaeger is the sole woman on the six-member executive board.

She has served on the board and the central bank's governing council since January 2014, and was until February vice-chair of the supervisory board of the Single Supervisory Mechanism, which performs oversight of more than 100 "significant" banks in the single currency area.

Mr Draghi "thanked her for her instrumental role in helping set up and steer Europe-wide banking supervision, a key pillar of banking union, as well as her unwavering commitment to Europe", the bank added.

It gave no reason for her departure and declined to comment.

But the surprise move comes amid serious divisions within the bank's leadership over Mr Draghi's decision this month to unleash a huge stimulus package aimed at propping up the flagging eurozone economy.

ECB governors pushed the deposit interest rate further into negative territory and relaunched net purchases of government and corporate debt.

A deep split among the central bankers burst into the open a day after the monetary policy meeting.

Seven of the 25 members of the ECB governors - including Ms Lautenschlaeger - were against relaunching the quantitative easing programme of purchasing 20 billion euros (S$30.3 billion) worth of debt monthly from November, sources told AFP.

German central bank president Jens Weidmann, in a rare public broadside, accused Mr Draghi of "overshooting the mark", adding that "such a far-reaching package was not necessary".

Ahead of the meeting, several eurozone central bankers, including Mr Weidmann, had openly warned against unleashing a new round of stimulus so swiftly.

Ms Lautenschlaeger's departure follows a string of German board members exiting the ECB prematurely over the years including Juergen Stark and Joerg Asmussen.

Her replacement will be named by the European Council, made up of the leaders of the EU member states, in consultation with the European Parliament and the governing council of the ECB.

Mr Draghi himself is due to step down on October 31, when former IMF chief Christine Lagarde will take over.

AFP