MNI SOURCES: Publishing Rates Policy Votes May Heal ECB Wounds

     LONDON (MNI) - The European Central Bank may consider publishing monetary

policy voting records, as new President Christine Lagarde attempts to repair

divisions laid bare by public dissent following September's easing package, ECB

sources told MNI.

     Calls are mounting within the Bank for rules to require voting on decisions

which until now may have passed without a formal count within the Governing

Council once majority support was clear. As the ECB prepares to announce a

strategy review after next week's monetary policy meeting, officials also expect

a debate on whether the results of the votes should be made public.

     They also reported unease with proposals to give the ECB environmental

goals.

     Many national central bank governors felt "outsmarted and divided" by

former President Mario Draghi, who they accuse of railroading through

September's tiered rate cut and return to quantitative easing, one ECB source

told MNI.

     "This was more an issue than divisions arising from national perspectives,"

the source said, adding that Lagarde "will heal those wounds from the end of the

Draghi era."

     Voting should "be formalised," said the official.

     "In the context of having national governors who are at the same time

members of the Council it is probably better to not have it public, as it is

now," the official said, adding "This does not exclude the possibility that the

number of votes on any particular decision could be published in the accounts,

but without naming individuals. This is more probable."

     --GREEN DRIVE CAUSES DISQUIET

     Another official, however, argued that if numbers for and against measures

were made public, the media would eventually work out the identities of voters

anyway.

     A third source agreed: "If we do this to avoid Governing Council members

venting their anger on social media, or somewhere else, it would make more sense

to give the numbers and names of who voted for what, incorporated into the

accounts."

     Instituting regular votes could also change how Governing Council members

behave, the second official said.

     "The whole process could get more political than a unanimity, broad-based

consensus system," the second source said. ""The hawks might feel the need to

vote against the whole time. So there would need to be a whole new approach to

the discussions and how and when to do votes."

     The ECB's currently bare-bones accounts of its meetings would have to be

redesigned "to reflect better the content of the discussion and the arguments

deployed on either side."

     Officials see little chance of any change to rates or quantitative easing

soon, allowing Lagarde time to settle into the role.

     There is, however, disquiet at some of her early proposals, including calls

for the ECB to tackle climate change. While one official said it was clear that

the ECB's bond-buying programmes would favour green bonds, others said helping

the environment might not be an appropriate policy objective for a central bank.

     "Some working groups were mandated to elaborate the collateral framework in

this context, so it will return to the agenda - probably many times," a source

said, referring to green policy moves. "But probably not in a very glamorous

way, because there is a lot of reluctance from the governors not to mix monetary

policy with governmental objectives."

     Another source, a former ECB official, was concerned about mission creep

     "It seems to be in favour [in Brussels, in European capitals] now, but

tomorrow it may not. And what happens if there is a demand for the ECB to

address income inequality, or housing?" the former official said.

     An ECB spokesman said he could not comment on the remarks by MNI's sources.

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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