A Central Banking change that could impact markets.

Here is a short comment I published at my firm last week:

Do you have any idea who Benoit Couture or Jens Wiedmann are? Well they could have a large impact on securities markets in the near future. They are both candidates to replace Mario Draghi (head of the European Central Bank) when he is termed out this October 31st. Coeure is a Draghi disciple and he is assured to continue the current dovish policies.

Wiedmann is one of the most hawkish of the European central bankers and is currently the head of the Bundesbank. The German government could have an out sized say in who the next ECB Chair is. Angela Merkel could very well insist that its Germany’s turn to occupy the chair.

Wiedmann would more than likely reverse Draghi’s policies and tighten monetary policy, Coeure on the other hand would (as stated above) more than likely continue with Draghi’s dovish policies.

As the ECB has been one of the great providers of liquidity along with the JCB, a change in policy could have an out sized impact on security markets. Keep an eye on this story as we get closer to October.