Luis de Guindos, ECB Vice-President, discusses the importance of central bank independence, cooperation with the Federal Reserve, Europe’s financial security, and ECB policies in an interview conducted by Politico.
Luis de Guindos, Vice-President of the European Central Bank (ECB), emphasized the importance of independence in central banking for optimal inflation and interest rate outcomes. He stated that non-independent central banks risk politicization, which can undermine credibility and elevate interest rates.
He praised Federal Reserve Chair Jerome Powell’s professionalism and highlighted the need for the Fed’s independence to be maintained for market stability.
Regarding trust in the US as a partner, de Guindos confirmed that cooperation with the Federal Reserve remains normal, with swap lines and dollar deliveries supporting financial stability. He stressed that Europe’s financial security is managed by the ECB and European institutions, advocating for increased European independence in areas like defense, cloud services, artificial intelligence, and global payment systems.
The ECB is working to expand cooperation with other central banks by developing liquidity lines, though no concrete decisions have been made. De Guindos clarified that discussions about pooling dollar reserves with other countries have not taken place.
On banking regulation, he explained that the ECB maintains capital levels that support economic funding and competitiveness, citing the resilience of European banks amid recent US and Swiss banking issues. The ECB does not propose lowering capital requirements but monitors risks in the non-bank sector closely.
De Guindos discussed the European Commission’s upcoming report, stating the ECB has presented recommendations to simplify banking regulations, but final decisions will be made by the Commission. He emphasized the ECB’s cautious approach to risk, especially regarding proposals on Additional Tier 1 (AT1) capital, and highlighted efforts to reduce supervisory burdens through legislative and operational reforms.
Regarding the future ECB vice-president, de Guindos highlighted the importance of experience, institutional knowledge, and geographical balance, noting the absence of women among candidates and the potential candidacy of Isabel Schnabel. He acknowledged the importance of gender diversity and discussed the upcoming leadership transition, emphasizing that legal and procedural considerations will guide decisions.
Finally, de Guindos humorously noted that he remains the highest-ranking Spaniard in ECB history, joking about his record as long as Atlético Madrid supporters are in leadership.
