On Wednesday, November 15, 2017, Frankfurt School of Finance & Management welcomed Peer Steinbrück, the former German Federal Minister of Finance and currently Senior Advisor for ING-DiBa, for a lecture on the low interest rate policy of the European Central Bank (ECB). The student initiative FS Economy & Politics had organised the event. After a guest lecture in September, held by Friedrich Merz, this was the initiative’s second major event in 2017.
On behalf of Frankfurt School, Dr Heike Brost, Head of Degree Programmes & Executive Education, welcomed Peer Steinbrück and more than 400 guests, including students and staff of the business school. Dr Brost highlighted the student’s commitment that fosters the community at Frankfurt School.
During the lecture, Peer Steinbrück explained the ECB´s low interest rate policy and its impact on Europe. In 2012 Mario Draghi, President of the ECB, promised to do “Whatever it takes” in order to stabilise the euro during the crisis. According to Peer Steinbrück, this was a turning point for Europe and its economy. “At the peak of the euro crisis even a collapse of the European Monetary Union was possible. With his declaration to do everything possible to keep the Euro, Mario Draghi showed strength – especially towards speculators.
However, Peer Steinbrück also emphasised the problems caused by quantitative easing. In his opinion the current policy is not a permanent solution. “Although the ECB has provided stability with its strategy, this approach cannot last forever There are hardly any investment opportunities – especially the middle class suffers. Also, house prices are going up. There are indicators for a bubble”, said the former Federal Minister of Finance. In his view, there is a threat that the crisis of 2007 could be repeated.
Summing up, Peer Steinbrück advocated a moderate and well prepared interest-turn. “The political and economic environment must be kept in mind”, he concluded.
A Q&A Session after the presentation gave the attendees the possibility to ask questions about the lecture and Peer Steinbrück´s career.