Obituary: Karl Otto Pohl, the uncomfortable central bankers – THE WORLD

Obituary: Karl Otto Pohl, the uncomfortable central bankers – THE WORLD

The date might have had something harmonious. May represent a conciliatory signal. But not with this protagonist. When Karl Otto Pohl occurs February 6, 1990 from the Federal Reserve Building of the GDR and encounters a pack of journalists, he does not mince his words.

“It would be an illusion to believe that the introduction of the D-Mark in the GDR would solve any real problems of this country,” the president of the Bundesbank says. Although exactly envision the political leaders of the then Federal Republic at the same hour. But Poehl is against it. As with pretty much every currency policy shift in his tenure, he lies with the government in Bonn crosswise.

Karl Otto Pohl has the reputation of uncomfortable Fed played a decisive role -. and shown that the Frankfurt institution with its contradictions is often true

For eleven years was the Hanoverian at the head of the Bundesbank and belonged to so the most important presidents in the history of the Central Bank. At times, he was regarded as perhaps the most influential policymakers in the world. Now Poehl has died at the age of 85 years.

From journalist to Banker

“Karl Otto Poehl delivered the evidence that price stability and growth are not mutually exclusive, even in times of large monetary challenges, but price stability rather the basis for sustainable growth, “said the Bundesbank President Jens Weidmann today. Poehl have significantly contributed to the independence of the Bundesbank model for the European Central Bank, as well as the clear focus on the goal of price stability. This goal had always been guiding his actions during his time as president of the Bundesbank. “With him we lose a prominent central bankers, to whom we owe the European Monetary Union to date much,” said Weidmann.

It was Poehl clearly a career changer in central banking. After his studies in economics in Göttingen, he worked for several years as a business journalist. After that, he found himself in the financial industry: he became a member of the Board of the Federal Association of private banks in 1968

Two years later, he moved but in politics. and there he climbed as high on the hierarchy ladder a: Economy Minister Karl Schiller made to Poehl Secretary and Head of SME policy. The steep climb continued. In 1971 he was Economic Advisor of Chancellor Willy Brandt and after the election in 1972 Secretary of the Treasury under Helmut Schmidt

Now only came Poehl with monetary policy in contact, after all it was his time to the floating exchange rates and the creation of the European Monetary network. On this track Poehl should remain henceforth In 1977, he was appointed Vice President of the Bundesbank, three years later he was promoted to President

Warning of politicization

The direct exchange of the SPD-affiliated member of the government came in the leadership of the central bank not only for political opponents to harsh criticism. Mahner saw the independence of the Bundesbank in danger and warned against politicizing. But Poehl did what has since been demonstrated also so many other alleged vicarious agent of the government in the Bundesbank board: He emancipated quickly from the policy

To. sat Poehl beginning of the 80s a consistent policy of high interest rates by, although Chancellor Schmidt decided against it and was publicly opposed the orientation of “imaginary money supply targets” thundered. Simultaneously, the central bankers criticized the public sector deficits.

Much more he would not be able to deduct from his former political allies. As confirmed in 1987, the conservative-liberal government to once installed by the SPD Federal Reserve President for another eight years in office.

Finally Poehl enjoyed now internationally high reputation After the resignation of Paul Volcker as chairman of the US Federal Reserve, some observers saw in the Bundesbank president, the most important leading figure among central bankers

Poehl warned you

But Poehl remained from a policy perspective, an uncomfortable Fed chairman. The discussion of a common European currency took a ride, and the Bundesbank chief occurred mainly as a brakeman in appearance. Although he does not explicitly turned against the concern in itself, but warned repeatedly against you and rotten compromises

His most important requirement. The place to start a “Monetary Union in the small circle” make, because the economic conditions of the member countries would otherwise be too different. Known that the governments have not heard it, but adopted the euro ten years later in eleven countries at a time. However, a euro-crisis later Pöhls act warnings today almost visionary.

developed for the second major bone of contention between Frankfurt and Bonn the German unit. Pohl was strongly opposed “to fund the reunion with the printing press.” Particularly that of Chancellor Helmut Kohl sought. 1: 1 exchange of East German marks in D-Mark was it an abomination

For stability reasons, he pleaded for a conversion rate of 2: 1. Even otherwise, the central bankers were strict: When invited him to the then East German Prime Minister Lothar de Maizière to Berlin, he summoned this self-confident, but better to get his hand to Frankfurt – so as to avoid the impression that the Bundesbank could be summoning of the policy .

Kohl excluded him from

But again Poehl remained unheard. Even more: carbon pushed the Federal bankers simply sidelined. This culminated in an affront on that February 6, 1990: While Poehl visited the central bank of the GDR, the team advised in Bonn at the same hour on a rapid German-German monetary union, which had declined as a quick shot of the Federal banker – and without involving him or even informing. “I stood there like a Dachshund, in New York, everywhere,” said Pohl echauffierte years later.

The tablecloth between him and the federal government was quite obviously cut. From then criticized Poehl blatantly “catastrophic conditions” that have triggered the hasty in his view, monetary union with the GDR in East Germany -. An opinion shared by so many economists in retrospect

In May 1991 finally threw Poehl the chunks out. . Officially “personal reasons”, but it was obvious that the differences with the federal government were the reason for the withdrawal

remained headstrong Poehl afterwards: As early as 1992, he appeared as a general partner in the management of the Cologne-based private bank Sal Oppenheim -. and did not care about the intended period of absence for ex-central banker, which is only thanks to a waiver of the Bundesbank was possible

Not always a happy hand

no longer works as a tour de force in Pöhls Biography time in Cologne banking house whose chief he later became, of course, necessarily. Because of his successor Matthias Graf von Krockow, who took over the bank peak in 1998 sank Sal. Oppenheim be rescued eleven years later in a swamp of losses and scandals and could only through a forced sale of the German bank.

Rather unfortunate remained the later advised by Poehl financial investor Christopher Flowers, who lost billions at HSH Nordbank and Hypo Real Estate.

For the euro crisis took later Pöhls vision – were confirmed but his concerns to the start of the monetary union, which was not accompanied by political integration or convergence of economic policies in the member countries

The avid golfer but resisted the temptation to savor the late triumph was only rarely in recent years interviews. And although he was against the Euro, as he admitted now open, he credited the European Central Bank, at least for the first ten years of its activity a wise policy. “The only mistake was,” Pohl said in 2010, “that you have added countries like Greece.”

Since it would today probably exceptionally, agree with the federal government.