In Good Company with Nicolai Tangen - HIGHLIGHTS: Christine Lagarde - President of the European Central Bank

Episode Date: March 27, 2026

We've curated a special 10-minute version of the podcast for those in a hurry.   Here you can listen to the full episode: https://podcasts.apple.com/no/podcast/christine-lagarde-central-bank-independence-geopolitical/id1614211565?i=1000756916046&l=nbNicolai Tangen sits down with Christine Lagarde, President of the European Central Bank, for a wide-ranging conversation on the forces reshaping the global economy. They discuss geopolitical fragmentation, the impact of US policy shifts on Europe, energy vulnerability, the green transition, and the future of Europe's social democratic model. Lagarde also reflects on the ECB's mandate amid rising complexity and what it means to lead with clarity in uncertain times. Tune in for an insightful conversation!In Good Company is hosted by Nicolai Tangen, CEO of Norges Bank Investment Management. New full episodes every Wednesday, and don't miss our Highlight episodes every Friday.  The production team for this episode includes Isabelle Karlsson and PLAN-B's Niklas Figenschau Johansen and Sebastian Langvik-Hansen. Background research was conducted by Une Solheim. Watch the episode on YouTube: Norges Bank Investment Management - YouTubeWant to learn more about the fund? The fund | Norges Bank Investment Management (nbim.no)Follow Nicolai Tangen on LinkedIn: Nicolai Tangen | LinkedInFollow NBIM on LinkedIn: Norges Bank Investment Management: Administrator for bedriftsside | LinkedInFollow NBIM on Instagram: Explore Norges Bank Investment Management on Instagram Hosted on Acast. See acast.com/privacy for more information.

Hi, everybody. Tune in to this short version of the podcast, which we do every Friday for the long version. Tune in on Wednesdays. Hi, everyone. I'm Nicola Tangan, the CEO of the Norwegian Southern Wealth Fund. And today we are in particularly good company because we are in Frankfurt with Christine Lagarde, president of the European Central Bank. Lovely to see you, Nicolai. Fantastic. And welcome to Frankfurt. Thank you.

Now, Christine, you've been, you had a tremendous career. You were running a global law firm. You've been the finance minister of France. You ran the IMF for a decade, and now you are staring the monetary policy of Europe. So thanks for seeing us. That's a great pleasure. I heard you recently say that the world now looks a bit like 1929.

What is similar? I think the analogy I made was with the 20s, because it's a time when there were major technology breakthrough. Yeah. That of course we take for granted, but which were new at the time, you know, the combustion engine, the manufacturing line, all sorts of things that just came about together. At a time when fragmentation started to also significantly change the way the world worked because it was preceded by a period of open trade and the first globalization, if you will.

And we are seeing a bit of that at the moment. Technological breakthrough, which I would associate with the development of AI and the diffusion of AI on the one hand. And fragmentation challenges to the international world order as we have known for decades. So that's the analogy. And I think that we have to be informed by history and try to avoid what came after those developments in the 20s that ended up with number one financial crucial. crisis, bankruptcies of banks in Europe, and eventually because the matter was not handled very well

at the time, a global conflict that destroyed many of the advanced economies and made all of us at the time poorer and fewer. What's the added complexity from what we are seeing in the Middle East? Well, I would say the constraint, I mean, apart from the horrible drama that afflicts the life of people, the situation of families, the civilian population that eventually end up being the target of those wars. So putting that aside, which is a big put aside, it impacts the global economy in that energy sources. Oil, gas are under threat in terms of transportation, shipping, the strait of formers comes to mine right away. And as a result of that, we see prices increasing significantly. And we see a volatility that is unprecedented in the last few decades,

where suddenly the price of oil can go up by 30% and go down by 30% in a matter of one day. So that's what the Middle East current war development is creating for the rest of us. Disruption in shipping, disruption in insurance costs and obviously significant increases in the price of energy, which as we know is necessary for all economies and has ripple effects in a matter of months. Now there's been some changes in policymaking in the US. We attended the same opening dinner in Davos and you were sitting at the table next to where I was. And you didn't seem very happy at the time. So what went through your mind?

You could see that. I'm very bad at covering up and having a poker face. So what I thought was not acceptable is the fact that a US government representative without, you know, contradiction and without any kind of dialogue could in, you know, at the end of a dinner which was, which had the participation of many European leaders, including, you know, royalties and, and representatives of those countries that he could just harang and and bash Europe in the way he did. And I thought, okay, well, that all opinions are, are welcome as long as there is a debate. But the way in which this came about was to me not acceptable, so I left the room.

Were there some truth in what he said? I think that every economy, every individual, every corporate has elements of vulnerabilities and of, you know, being wrong. And Europe does not escape that particular judgment passing, if you will. But to bash the green transition, to bash the green transition, to bash the the wind energy or the solar energy in the way it was done, I thought it was just not in the cards. Independence, you initiated a statement where you gave full support to the American Fed chair. Yeah.

Why is it important? So, naive question. Why is it important for a central bank to be so independent? For two reasons. One is we have a narrow man. mandate and we have to deliver on that mandate and we have to be accountable. But to do that, we need the level of independence is the best word to describe it. In other words, being exclusively focused on the mandate requires that you're not, you know,

sort of vulnerable and moved around and shaken by other imperatives that people have. So it's to singly focus on that, you're better off not having, you know, others inserting their own priorities, their own prejudice in what you have to deliver. Singleness of mandate, that's one. The second one is an issue of timing. Because when we decide on the monetary policy front, whether you hike, whether you cut, whether you hold, whether you think that you are at such a lower bound level that you have to use alternative tools, those decisions take time.

It doesn't deliver immediately a result. It's a matter of six, nine, 12, sometimes more months. Whereas political leaders, fiscal authorities, have different timing imperatives. They think about two things. The immediate effect in terms of the public opinion and their followership or their readership or their votership and the next election. That's the timing imperatives that they operate under. And there is nothing wrong with that. That's the way politicians operate.

But if I tell a politician who says to me, we need to deliver some good for the public opinion because they're concerned about this or that, I cannot do that. And I shouldn't do that because this is going to impact in a year's time. Why is a digital euro so important when it comes to making the euro an important or continue to keep euros an important currency? If I talk to my children and my grandchildren, do they carry banknotes?

Not much. Do they pay digitally? Yes, so. Do I think that central bank money is critical in order to structure, organize and hold the financial system? Yes. So my conclusion from those two elements is we should have a central bank currency which is available in digital form. added to which I think that the rail guards on which digital currencies and digital assets travel is a public good and I think that we should be building it. Does that mean that only the digital euro travels on those rail guards? No.

When will we have a digital euro in volume? It will be in pilot phase, you know, parliamentary decisions volente in 2026. and then complete rollout in 29. Christian, moving on to leadership. How are you as a leader? Oh, you have to ask the other people, not me. But what are your principles? What do you believe in?

I believe in listening, in learning, in working, and ultimately in leading as a result. But am I an inclusive leader rather than a sort of, I'm on the top of the hill, follow my flag? I'm more of an inclusive leader. Are you a better leader? I don't take personal pleasure out of, you know, I instruct, I order, I exercise power. This is not something that I find neither satisfying nor particularly productive. So I'm more of an inclusive person.

To which extent are you a different leader now compared to when you led the law firm? I think I'm more impatient than I was. Oh really? Yeah. Passing off time, you see. Right. And how does that materialise itself? I have to sometimes refrain my frustration and my annoyance with things moving too slowly.

Right. That requires a big effort on myself.