The sleeping giant

EZB_Bundesbank2 (2)
The ECB saw more action than the Bundesbank on Wednesday. Action Press/Imago [M]
  • Why it matters

    Why it matters

    Despite differences with the ECB, the Bundesbank, Germany’s national central bank, actually still wields significant influence over the course of European monetary policy.

  • Facts


    • The Bundesbank became West Germany’s central bank in 1957 and in 1999 joined 10 other central banks led by the ECB.
    • The German central bank is responsible for implementing ECB decisions in Germany, and has about three times as many employees as the ECB.
    • Germany provides about a quarter of the ECB’s capital, but the Bundesbank president has just one vote on monetary policy.
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Jens Weidmann may have been happy he wasn’t in charge of Europe on Wednesday.

As thousands of protesters battled police outside Mario Draghi’s European Central Bank headquarters in Frankfurt, setting fire to police cars and shouting anti-capitalist slogans, Mr. Weidmann’s office on the outskirts of the city escaped the chaos mostly untouched.

Once upon a time Mr. Weidmann’s Bundesbank, Germany’s central bank, would have been the target of the protests. Located in an imposing, drab, concrete 1950s-era building, the Bundesbank’s headquarters sits about six kilometers (3.7 miles) from the ECB’s spanking new twin-glass towers.

The Bundesbank has seemingly been sidelined. Mr. Weidmann, its current president, a post that makes him one of the standard-bearers of German economic thought, has been repeatedly outvoted by the ECB’s 25-member governing council – decisions he thinks are putting the euro zone at risk.

But any suggestion that the Bundesbank no longer has influence over monetary policy in Europe is “much too short-sighted,” said Otmar Issing, a former Bundesbank board member and the ECB’s first chief economist, in an interview with the Handelsblatt Global Edition. He’s now a finance professor in Frankfurt. “The impact can’t simply be measured by how the majorities are currently falling.”

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