Hans Tietmeyer, 1931-2016

Former Bundesbank president played key roles in German reunification, European single currency and reform of international financial regulation
Hans Tietmeyer. Photo: INSM

Hans Tietmeyer, former president of the Deutsche Bundesbank, died on December 27. He was the Bundesbank's leader during both the latter stages of German reunification and the adoption of the European single currency, and also played a significant role in global financial regulation.

Tietmeyer joined the board of the Bundesbank in 1990, becoming the bank's vice-president the following year. In 1993, he succeeded Helmut Schlesinger as the Bundesbank's president, serving until August 1999.

He took the role at a tumultuous time. The German Federal Republic was absorbing the eastern states after the collapse of the communist German Democratic Republic. The decision by Germany's then-chancellor Helmut Kohl to introduce the Deutschmark at a one-to-one parity with the defunct state's currency was highly controversial and led to a rise in inflation.

The Bundesbank, under Tietmeyer's presidency, lived up to its reputation as a stern guardian of price stability with a strongly restrictive monetary policy.

Kohl had also successfully pushed European Union states to move towards a single currency. The framework for creating the euro was contained in the Maastricht Treaty, agreed in December 1991. But it was not clear whether the citizens of European states, with Germany easily the most important, would accept the creation of a new currency.

Tietmeyer played a key role in persuading German citizens to adopt the euro and abandon the Deutschmark, former Deutsche Bank chief economist Norbert Walter said. It was of a "small circle of politicians" aided by "supportive central bankers such as Hans Tietmeyer" who had led Germany into the eurozone, Walter wrote in a Central Banking article in May 2012.

Tietmeyer was born on August 28, 1931. He read theology and considered becoming a Catholic priest before switching to economics, which he studied at several universities. In 1962, he joined the German federal finance ministry, then led by Ludwig Erhard, the finance minister who was a key figure in the German postwar "economic miracle".

Tietmeyer survived an assassination attempt in 1988 by a terrorist from the far-left Red Army Faction, when his would-be killer's gun jammed. From 1990, he worked closely with Kohl on the task of integrating the economies of capitalist 'West Germany' and the communist 'East'.

"A true European"

Mario Draghi, the current president of the European Central Bank, described Tietmeyer as "an outstanding central banker" and "a true European". Tietmeyer had "made price stability the the cornerstone of our mandate", the ECB president said. Draghi also lauded Tietmeyer's service, after his resignation as Bundesbank president, on the ECB's audit committee.

Draghi praised Tietmeyer's conviction that eurozone central bankers should act as Europeans rather than as spokesmen for national interests, saying this had made the ECB "a truly European institution". Otmar Issing, a former Bundesbank board member, remembered how Tietmeyer protested when, at the first meeting of the ECB's governing council, national central bank governors sat behind plates showing their name and countries.

"We are not representatives of our countries," Issing recalled Tietmeyer saying. Since then, national central bank governors in ECB meetings sit behind plates bearing only their names.

The Bundesbank's current president Jens Weidmann called Tietmeyer "an outstanding president, whose actions always followed clear and consistent lines aimed at maintaining monetary stability".

The Tietmeyer report

Tietmeyer also played an important role in changing international financial regulation. Following the international financial crises of 1998, Tietmeyer produced an eponymous report for the Bank for International Settlements in 1999.

The Tietmeyer report recommended that the Group of Seven nations create a financial stability forum with representatives from their finance ministries, central banks and supervisory authorities. Tietmeyer also recommended that Andrew Crockett should be the forum's first head. Both recommendations were accepted.

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