The euro, its central bank and economic governance

The Stamp Memorial Lecture

The lecture is in memory of Josiah Charles Stamp, an alumnus and former governor of LSE.

The recent financial crisis has been a turbulent period for policy-makers around the world. Originating in and mostly affecting the financial sector, it has forced central banks to take unprecedented steps to contain the situation and its fallout for the real economy. Overall, this has been achieved, and economic activity is gradually recovering around the world. Risks remain, however, including systemic risks, and the advanced economies are still a long way from achieving sustainable economic growth and job creation.

Jean-Claude Trichet, President of the European Central Bank (ECB), explains how his institution reacted swiftly to the challenges of the financial crisis through non-standard measures. However, at the same time, it has continued to remain faithful to its mandate of maintaining price stability in the euro area over the medium term through standard monetary policy measures. Looking ahead, Mr Trichet also argues that the unwavering actions of the ECB and its decision-making bodies need to be paralleled by a quantum leap in the economic governance of the euro area. The citizens of the euro area want stronger and better coordination of economic and financial policies and are calling for governments to deliver a deeper and more effective economic union.

Born in Lyon, Jean-Claude Trichet is an "Ingénieur civil des Mines", a graduate of the Institut d'études politiques de Paris and holds a Bachelor's degree in economics. He worked in the competitive sector from 1966 to 1968, attended the Ecole nationale d'administration in 1969 and was appointed "Inspecteur adjoint des Finances" in 1971.
He was then assigned to various posts at the Ministry of Finance in the General Inspectorate of Finance and later in the Treasury Department, where in 1976 he became Secretary General of the Interministerial Committee for Improving Industrial Structures (CIASI).

Jean-Claude Trichet was made an adviser to the cabinet of the Minister of Economic Affairs (René Monory) in 1978, and then an adviser to the President of the Republic (Valery Giscard d'Estaing) in the same year. In this capacity, he worked on issues relating to energy, industry, research and microeconomics from 1978 to 1981. He subsequently became Deputy Director of Bilateral Affairs at the Treasury Department from 1981 to 1984, Head of International Affairs at the Treasury and was Chairman of the Paris Club (sovereign debt rescheduling) from 1985 to 1993. In 1986, he directed the Private Office of the Minister of Economic Affairs, Finance and Privatisation (Edouard Balladur), and in 1987 he became Director of the Treasury. In the same year, he was appointed Censor of the General Council of the Banque de France and Alternate Governor of the IMF and the World Bank. He was Chairman of the European Monetary Committee from 1992 until his appointment as Governor of the Banque de France in 1993. He was the Chairman of the Monetary Policy Council of the Banque de France as of 1994, a member of the Council of the European Monetary Institute from 1994 to 1998 and thereafter a member of the Governing Council of the European Central Bank. At the end of his first term as Governor of the Banque de France, he was reappointed for a second term.

Jean-Claude Trichet was elected Chairman of the Group of Ten (G10) Governors on 29 June 2003. He was appointed President of the European Central Bank in October 2003, taking up the position the following month. In 2010 he became Chair of the European Systemic Risk Board.

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