As Europe navigated through crises and difficult times, she brilliantly modernised and strengthened the institution,ā he posted on social media.Marcel Fratzscher, president of the German Institute for Economic Research, told the Reuters news agency the early exit gives governments āan opportunity to appoint a successor who will safeguard European values and protect the ECBās independenceā.Markets appeared unfazed. āOur view is that institutional behaviour is likely to outlast Lagarde and be quite similar, whoever takes over,ā Simon Dangoor, head of fixed income macro investing at Goldman Sachs told Reuters.Lagarde, appointed in October 2019, steered the bank through the COVID-19 pandemic, Russiaās full-scale invasion of Ukraine and the United States-Israel war on Iran.The ECB faced criticism for responding too slowly to the 2022 inflation surge, caused by post-pandemic supply chain bottlenecks and the war on Ukraine. Inflation is currently running at almost double the bankās 2 percent target amid worries over Franceās public finances.A former French finance minister and head of the International Monetary Fund, Lagarde arrived in Frankfurt in 2019 as the first ECB chief with no formal economics training or central banking experience, prompting some market participants to warn of a ācredibility riskā.In March 2020 as the pandemic shook sovereign debt markets, she said the bank was not there to narrow the gap between Italian and German borrowing costs.
She went on to show that political diplomacy could steer a central bank through historic shocks.Sources told the AFP news agency that leaving early would give Lagarde āgreater freedom to express her viewsā. She has hinted she could campaign in the French presidential race, saying a European voice was needed in the debate.