A superb inside account from Reuters. It narrates how Draghi managed to convince ECB officials to agree to Sep-12 policy of conditional unlimited bond buying.
It all started on this surprise speech at London in late July (comments here):
On a warm summer day on the eve of the Olympic Games, European Central Bank President Mario Draghi stood up at a business conference in London and dropped a bombshell.
“Within our mandate, the ECB is ready to do whatever it takes to preserve the euro,” Draghi told the audience in Lancaster House, a grand building in central London, then paused for effect. “And believe me, it will be enough.”
Global markets, full of talk of a euro zone break-up, rallied sharply on Draghi’s unexpected message. Just as shocked were the ECB boss’s aides and his colleagues on the bank’s policymaking Governing Council, none of whom knew Draghi would make such a sweeping promise.
“Nobody knew this was going to happen. Nobody,” one senior ECB official said of the speech.
The truth was, the speech was just the beginning. Draghi was in no position to guarantee “whatever it takes.” His words were a gamble that set off weeks of frenzied backroom diplomacy and public sparring that would severely test the relationships of the main protagonists in the euro zone crisis.
What follows is a duel between Draghi and Weidmann and how former won over ECB guys..
Superb stuff.
