Mario Draghi Biography
Born on 3 September 1947, Mario Draghi OMRI is an Italian economist who has served as President of the European Central Bank since 2011. From 2009 to 2011, he previously served as Chairman of the Financial Stability Board and Bank of Italy Governor from 2005 to 2011. From 2002 to 2005, Draghi previously worked at Goldman Sachs. Forbes listed Draghi as the 8th most powerful person in the world in 2014. In 2015, he was ranked by Fortune magazine as the second biggest leader in the world. His term will end on October 31, 2019.
Mario Draghi Age
He is 71 years old as of September 2018.
Mario Draghi Early Life
In Rome, Draghi was born. In 1922, his father Carlo joined Banca d’Italia, then IRI, and finally Banca Nazionale del Lavoro. His mother was a pharmacist, Gilda Mancini. Mario is the first of three children: art historian Andreina and entrepreneur Marcello. He studied at the Massimiliano Massimo Institute and graduated under Federico Caffè from La Sapienza University with his thesis on Economic Integration and Changes in Exchange Rates. He then earned a PhD in economics from the Massachusetts Institute of Technology in 1976 under the supervision of Franco Modigliani and Robert Solow with his thesis entitled Essays on Economic Theory and Applications.
Mario Draghi Career
From 1981 to 1994, Draghi was a full professor at the University of Florence’s Cesare Alfieri Faculty of Political Science and a fellow at the John F. Kennedy School of Government, Harvard University (2001). He was the World Bank’s Italian Executive Director from 1984 to 1990. In 1991, he became General Director of the Italian Treasury at the initiative of then Minister Guido Carli and held this office until 2001. He chaired the committee that revised Italian corporate and financial legislation during his time at the Treasury and drafted the law governing Italian financial markets.
Mario Draghi
He is also a former member of the board of several banks and companies (Eni, Istituto per la Ricostruzione Industriale,[8] Banca Nazionale del Lavoro and IMI). Draghi was then Goldman Sachs International’s vice president and managing director and a member of the company-wide management board (2002–2005). He worked with major European corporations and governments on the company’s European strategy and development. Following Greece’s revelation of off-market swaps with Goldman Sachs ‘ help, he said he “knew nothing” about this deal and “had nothing to do with” He added that “the deals between the Greek government and Goldman Sachs had been undertaken before[ his] joining of[ the company].”
Draghi is a trustee at the Institute for Advanced Study in Princeton, New Jersey, as well as at the Brookings Institution, Washington, D.C. As governor of the Bank of Italy, he was a member of the European Central Bank’s Governing and General Councils and a member of the Bank for International Settlements’ Board of Directors. He is also Governor for Italy on the International Bank for Reconstruction and Development and the Asian Development Bank’s Boards of Governors.
Draghi was appointed Governor of the Bank of Italy in December 2005 and elected Chairman of the Financial Stability Forum in April 2006; this organization, which became the Financial Stability Board on behalf of the G20 in April 2009, bringing together representatives of governments, central banks, national supervisors and financial markets, international financial institutions, It aims at promoting international financial stability, enhancing market functioning and reducing systemic risk through exchange of information and international supervisory cooperation. He and the ECB’s immediate past governor, Jean Claude Trichet, wrote a letter to the Italian government on 5 August 2011 to push for a series of economic measures to be implemented in Italy soon.
Jean-Claude Trichet, whose term as President of the European Central Bank ended in October 2011, was frequently mentioned as a potential successor to Draghi. Then, in January 2011, the German weekly newspaper Die Zeit reported that it is “unlikely” that Draghi will be selected as Trichet’s successor, with reference to high-ranking policymakers in Germany and France. However, the situation became even more complicated in February 2011 when it was reported that the main German candidate, Axel Weber, was no longer seeking the job, reviving the other candidates ‘ chances. On 13 February 2011, Financial Times associate editor Wolfgang Münchau endorsed Draghi as the best candidate for the position.
A few days later, The Economist wrote that “the next president of the world’s second-most-important central bank should be Mario Draghi” The Wall Street Journal reported on 20 April 2011 that “Wolfgang Schäuble, Germany’s finance minister, is open to Mr. Draghi for the post of ECB President” A few days later Draghi was endorsed by the German newspaper Bild by defining him as “most German of all remaining candidates” Contrary to previous reports on the position of France, it was reported on April 25 that President Nicolas Sarkozy saw Draghi as a full-fledged candidate for the job. Draghi and Jean-Claude Trichet and Dominique Strauss-Kahn. On 17 May 2011, the Council of the European Union, sitting as Ecofin, adopted a recommendation on the appointment of Draghi as President of the ECB[25], which was approved by the European Parliament and the ECB itself and confirmed by European leaders on 24 June 2011. When the non-renewable eight-year term of Trichet expired on 31 October 2011, Draghi started leading the Frankfurt-based institution.
The term of Draghi runs from November 1, 2011 to October 31, 2019. Although France backed the candidacy of Draghi for a long time, the country held the appointment to the end, insisting that Lorenzo Bini Smaghi, an Italian official on the six-member board of the ECB, cede his post on the board to a French official. Concerns about Draghi’s past job at Goldman Sachs were also expressed during the candidacy. Pascal Canfin (MEP) claimed that Draghi was involved in swaps for European governments, especially in Greece, attempting to mask the economic status of their countries. Draghi replied that the deals were “undertaken before my joining Goldman Sachs[ and] I had nothing to do with them” at the nomination hearings of the European Parliament in 2011.
Draghi oversaw a € 489 billion ($ 640 b.), the ECB’s three-year loan program to European banks in December 2011. The program was about the same size as the U.S. Troubled Asset Relief Program (2008) but still much smaller than the overall response from the U.S. including asset purchases and other actions of that time by the Federal Reserve. Draghi’s ECB also promptly “repealed the two foolish rate hikes made by his predecessor… Trichet[ and]… stepped up the bond purchases from struggling euro-zone nations” commentator Steve Goldstein wrote in mid-January 2012. At that time, “Draghi and all his colleagues (the decision was unanimous) chose not to cut the price of private-sector loans [below the 1% achieved with the ‘repeal’], even if he predicts inflation to fall below the 2% target later this year.” According to Goldstein, Draghi would leave further moves to national leaders Sarkozy and German Chancellor Angela Merkel and cen. At the 2012 World Economic Forum, Mario Draghi.
Nobel laureate in economics Joseph Stiglitz argued in February 2012 that, on the issue of the imminent Greek debt restructuring, the ECB’s insistence that it must be “voluntary” (as opposed to a default decreed by the Greek authorities) was a gift to financial institutions that sold credit default insurance on that debt; a position that is unfair to the other parties and constitutes a gift to the other parties; A second, somewhat larger round of ECB loans to European banks under Draghi, called the long-term refinancing operation (LTRO), was launched late in February 2012. One commentator, Matthew Lynn, saw the ECB’s injection of funds, together with the US Fed’s Quantitative easing and the Bank of England’s Asset Purchase Facility, as oil price increases in 2011 and 2012 were feeding.
In July 2012, in the midst of renewed fears about eurozone sovereigns, Draghi said in a panel discussion that the ECB”… is ready to do whatever it takes to preserve the Euro. And believe me, it will be enough.” This statement resulted in a steady decline in bond yields (borrowing costs) for eurozone countries, especially Spain, Italy and France. Given the slow political progress in resolving the crisis in the eurozone, Draghi’s statement was seen as a key turning point in the eurozone’s fortunes.
In April 2013, in response to a question about membership in the eurozone, Draghi said that “These questions are formulated by people who vastly underestimate what the euro means for the Europeans, for the euro area. They vastly underestimate the amount of political capital that has been invested in the euro.” In 2015, Draghi said in an appearance before the European Parliament that the future would be. “We have not yet reached the stage of a genuine monetary union,” said the president of the central bank, Mario Draghi, in a speech to the Brussels European Parliament.
The eurozone countries ‘ failure to harmonize their economies and create stronger institutions, he said, “puts at risk the long-term success of the monetary union when faced with an important shock.” Mr. Draghi has often urged governments in the eurozone to do more to improve their economic performance, such as by revising restrictive labor regulations. But it was unusual for him to suggest that the eurozone’s future might depend on whether countries were listening to his advice.
On March 10, 2016, after declaring at a press conference that he believes the concept is’ very interesting,’ Draghi provoked a wave of talks on the concept of’ helicopter money’: we haven’t really thought about or talked about helicopter money. It’s a very interesting concept that academic economists are now discussing in different environments. But we haven’t studied the concept yet.
Prima facie, it clearly involves complexities, both from an accounting point of view and from a legal point of view, but by this term “helicopter money” one can mean a lot of different things, so we have to see that. Draghi is a member of the Rockefeller Foundation’s Group of Thirty. The Thirty Group is a private group of finance lobbyists. For this reason he is accused as president of the ECB of having a conflict of interest.
Some parties also see a conflict of interest in Draghi’s former work at Goldman Sachs. In the context of the scandals surging around the bank Banca Monte dei Paschi di Siena (MPS), which made very risky deals, Draghi was criticized starting in 2013.
Mario Draghi News
Opinion | Hold those hagiographies of Mario Draghi as ECB chief.
There is something very strange about journalists, living in the “here and now” and covering events as they unfold, trying to write judgements of history. That is what, in recent days, journalists writing for the Financial Times have been doing with respect to Mario Draghi. The president of the European Central Bank (ECB) is due to retire by November 2019. Many appear to be showing undue haste in cementing his place in history. Anxious to establish facts on the ground and to claim the “first-mover advantage”, journalist Claire Jones wrote (The ECB After Draghi: ‘You Need An Actor Who Can Act Fast’) in the Financial Times on 13 March that the Eurozone needed a leader who could act fast, with the subtext being that Draghi did just that in 2012. He is credited with having acted boldly to save the Eurozone.
The reason it is strange to find journalists attempting historic judgements is that their assessment could be too transient. They risk being overtaken by events sooner than they think. In February 1999, Time magazine featured on its cover Robert Rubin, Larry Summers and Alan Greenspan, calling them the “Committee to save the world”. One year later, information technology stocks peaked and the bubble of the Nasdaq Composite index burst. Both ended the much-touted American productivity miracle which has not made a reappearance since then.
Robert Rubin came from Goldman Sachs to the US Treasury and, from there, he went to Citigroup and lost much of his credibility. Larry Summers did not really set the Potomac on fire with policy decisions but nonetheless found himself on the Time cover. Alan Greenspan admitted a flaw in his model after the 2008 financial crisis and then retracted some of his admission. Therefore, based on the Draghi hagiographies that are appearing, it might be a good long-term decision to “sell” Draghi.
Second, a historical judgement must consider contrarian evidence and explain why it matters less. For example, on 11 February, Robert Smith wrote in the Financial Times (Europe Faces A Reckoning As ‘The Bezzle’ Bites QE) that the monetary stimulus of the ECB had led to a period of psychic wealth generation that was now unravelling. The article mentions three bonds that lost half to two-thirds of their value within months of the ECB buying them, and another one went from raising money in the bond market in 2017 to defaulting in 2018. Who bears losses incurred by the ECB on such bonds?
In an era of “fiat money”, perhaps they are not really losses because the central bank printed money and bought them. Nonetheless, money is fungible; it has alternative uses and ECB’s purchase of these bonds amounted to a transfer of public resources into private hands. In democracies, one would expect an inquiry into such purchases and such a probe might even result in the resignation of the head of the central bank. But in Europe, members of the European Parliament were jostling to take selfies with Draghi.
Further, one should question the efficacy of Draghi’s bold rescue acts if, within months of his promise to declare them unnecessary, the Eurozone economy is gasping for oxygen. In other words, if a patient fell sick (again) immediately after the medicine was withdrawn, then did the medicine leave the patient better off or did it render him worse off?
The response to this would be that Draghi’s monetary medicine would have worked better had it been backed up by structural reforms and fiscal stimulus across the Eurozone. However, a good doctor would have to factor in the circumstances and probability of such follow-up action being taken and, second, the costs and benefits of his medicine if these actions were not taken. Did the ECB, under Draghi, do that?
German newspapers and commentators have linked the ECB’s monetary policy approach to the rising spread of nationalism, populist but ultimately unviable and unsustainable economics, and rising inequality in Europe. They have a point. The central bank’s policies have boosted debt and asset prices. Unfortunately, both of them are not part of the same balance sheet. Some have become more indebted and others have become wealthier. The fact that prices of financial and real assets have recovered while economic recovery has floundered means that employment and incomes have not risen as much as wealth.
By misjudging the secular decline in potential growth as a secular stagnation or deficient aggregate demand, monetary policy has exacerbated the problem. The former requires acceptance of lower growth, some redistribution through higher taxation and targeted relief for bottom quintiles of the population. Instead, monetary policy has damaged the economy’s ability to generate and sustain spontaneous growth and has made it permanently dependent on monetary medicine. Draghi’s monetary policy is thus part of the problem. Documenting history serves a useful purpose for the future. Writing hagiographies, however, does a disservice to both the present and the future.