Otmar Issing

From Wikipedia, the free encyclopedia
Jump to navigation Jump to search

Otmar Issing (born 27 March 1936 in Würzburg) is a German economist. As the former Chief Economist and Member of the Board of the European Central Bank (ECB) Issing developed the 'two pillar' approach to monetary policy decision-making that the ECB has adopted.[1]


Issing studied economics at the University of Würzburg from 1955 until 1960 with temporary studies in London and Paris. From 1960 to 1966 he worked as a research assistant at the University of Würzburg. He earned his PhD in 1961 and received his postdoctoral lecture qualification (habilitation) in 1965. In 1967 Issing became director of the Institute for International Economic Relations at the University of Erlangen-Nuremberg and full professor at the faculty of economics and social sciences of the University of Erlangen-Nuremberg. In 1973 he took the chair of monetary affairs and international economic relations at the University of Würzburg.

From 1988 to 1990 Issing was a member of the German Council of Economic Experts and in 1990 he became a member of the board of the Deutsche Bundesbank. In 1998 Issing became a member of the Executive Board of the ECB as well as its first Chief Economist.

Since June 2006 Issing has been president of the Center for Financial Studies (CFS) at the Goethe University in Frankfurt am Main and since 1 January 2007 he has been an international advisor to Goldman Sachs.

In October 2008 Issing chaired a German government expert group on the new financial order that drew up proposals on how to reform international financial markets (also known as “Issing Commission”). The group published six reports. In 2008 Issing was also a member of the high level group of the European Commission on financial supervision in the EU chaired by Jacques de Larosière. In November 2010 received an Honorary Doctor of International Economic Integration degree from University of Pavia.


Issing’s scientific publications almost cover the whole range of recent economic policy issues. His two main research topics are monetary theory and policy and international economic relations.

His most recent books are:

  • Wie wir den Euro retten und Europa stärken“ published by Börsenbuchverlag in 2012.[2][3] The book argues that the euro is worth saving, but this will require reforms and some countries may be forced to leave.[4]
  • "Einführung in die Geldtheorie" (Introduction to Monetary Theory), fifteenth edition published by Franz Vahlen in 2011.[5]
  • Der Euro. Geburt - Erfolg - Zukunft” about the creation of the new European currency published by Franz Vahlen in 2008.[6]


Issing criticized the treaties that were signed by the EU member states at the beginning of the monetary union and were violated during the sovereign debt crisis. In particular, he warned EU member states not to violate the no-bailout clause that prohibits the assumption of liability for other countries’ debts.[7][8] Issing also criticized the ECB for buying government bonds of countries affected by the crisis.[9][10] Furthermore, he disapproves of the establishment of a European banking regulatory authority at the ECB.[11][12]

In October 2016 Issing warned that the Stability and Growth Pact was near to failure, there was no market discipline because of ECB interventions and no fiscal control mechanism from markets or politicians. The ECB had "crossed the Rubicon" and was in an untenable position, struggling to carry out its conflicting roles as agent of monetary policy, banking regulator, and Troika enforcer. Noting that the bank already held over €1 trillion of bonds bought at artificially low or negative yields, so would face great losses when interest rates rise again, he warned "The ECB is now buying corporate bonds that are close to junk, and the haircuts can barely deal with a one-notch credit downgrade. The reputational risk of such actions by a central bank would have been unthinkable in the past." His conclusion was that in its current form the euro project was unworkable and one day would collapse.[13]



  1. ^ Otmar Issing "The ECB’s Monetary Policy Strategy: Why did we choose a two Pillar Approach?," Contribution to: The role of money: money and monetary policy in the twenty-first century, 4th ECB Central Banking Conference (Frankfurt, 10 November 2006).
  2. ^ Deutches Anleger Fernsehen 03/aug/2012
  3. ^ "Wie wir den Euro retten und Europa stärken" (Börsenbuchverlag, 2012) ISBN 978-3-8647-0079-8
  4. ^ Euro founder admits some nations may be forced to leave
  5. ^ "Einführung in die Geldtheorie" (Vahlen, 2011) ISBN 978-3-8006-3810-9
  6. ^ "Der Euro: Geburt - Erfolg - Zukunft" (Vahlen, 2008) ISBN 978-3-8006-3496-5
  7. ^ Frankfurter Allgemeine Zeitung, 11.06.2012: „Europa in Not - Deutschland in Gefahr“
  8. ^ Financial Times, 29.07.2012: „Europe’s political union is an idea worthy of satire”
  9. ^ Financial Times, 30.11.2011: „Moral hazard will result from ECB bond buying”
  10. ^ Frankfurter Allgemeine Zeitung, 09.08.2012: "Die EZB wird zum Gefangenen der Politik"
  11. ^ Financial Times, 29.07.2012: „Europe’s political union is an idea worthy of satire”
  12. ^ Börsen-Zeitung, 29.12.2012: „Der Bock als Gärtner“
  13. ^ Euro house of cards to collapse, warns ECB prophet dated 16 October 2016 at telegraph.co.uk, accessed 29 October 2016

External links[edit]