From Institutional Investor's new "From the Archive" section, we are proud to offer you a glimpse into the past. Below is a story about the problems that faced the European Central Bank, originally published in September 2001 by now-International Editor Tom Buerkle. It is preceded by a short introduction:
The European Central Bank is facing the greatest challenge of its history. In recent months, the central bank has been the only institution with the capability of stopping the rout in European bond markets from breaking up the euro. The banks government bond purchases have been very controversial, though, prompting two senior bankers to quit the ECB and arousing political opposition in Germany. Its no exaggeration to say that the fate of the euro depends on the ability of the ECB and its new president, Mario Draghi, to steer a path through the debt crisis.
A decade ago, the ECB faced a similar, if less daunting, challenge. The euro had fallen sharply since its launch and many economists and politicians were questioning the abilty of the central bank and its first president, Wim Duisenberg,to manage the currency and the euro area economy. In Making Sense of the ECB, our September 2001 cover story, II went deep inside the Frankfurt-based institution to examine the shortcomings of the central banks framework and expose the gap between the banks top executives and Europes political leaders. The issue may have changed, but many of the tensions at the bank remain the same today.