Ms. Lagarde, President of the European Central Bank, which has an enormous influence on global financial markets, visited Japan to attend the G7 = Finance Ministers and Central Bank Governors' Meeting of seven major countries.
He has also served as France's Minister of Economy, Trade and Industry and Managing Director of the IMF = International Monetary Fund.
She is also attracting worldwide attention as a top female leader.
NHK interviewed Governor Lagarde in Niigata City, the venue of the G7.
We will tell you more in the Q&A. (Economic Affairs Reporter: Aya Shinoda)
What are the outlook for inflation and future monetary policy in Europe?
(The European Central Bank decided to raise interest rates for the seventh time in a row at its May 7 meeting ahead of the G5 meeting to contain record inflation.)
However, the rate hike has narrowed from 4.7% to 0.5%.
Q. What does the narrowing of interest rate hikes mean? What is your outlook on inflation in Europe and future monetary policy?
A. Last week we decided to scale back the rate hike from 0.25% to 0.5%, but we're continuing our journey of fighting inflation and it's not over.
The battle will end only when we are fully confident that we can achieve the 0 percent inflation target in the medium term.
Since the military invasion of Ukraine by Russia, the rise in energy prices has been very severe.
It is highly likely that the peak of inflation has passed, as energy prices, which have pushed up prices, have fallen.
However, inflation excluding energy and food is still too high and uncertain.
How do you view financial instability in the wake of a series of bank failures?
Q.Since March this year, U.S. banks have gone bankrupt one after another.
How do you view the simmering financial instability in Europe and the United States?
A. Despite the failure of local banks in the United States and the disruption caused by Credit Suisse, our banking system is highly supervised, highly regulated, and regulated to all banks of all sizes.
Financial conditions have recently stabilized again, and markets have been stable.
In order not to create a situation that threatens price stability, which is the mission of the central bank, I consider it important to make regulations and supervision strong and in-depth.
What discussions at the G7 on financial instability in the digital age?
(The bankruptcy of the "Silicon Valley Bank" in the United States triggered a rapid outflow of deposits through Internet financial services triggered by social media posts.) It is also called a "digital bank run" in the sense of attaching deposits in the digital age.
Q. What kind of discussions will be held at the G7 meeting on such financial instability?
A. We will examine the lessons to be learned from bank failures and the role that SNS = social media played in the speed of development.
If you feel the need for tighter regulations or international cooperation, you will discuss it and aim for an agreement.
What are your thoughts on issuing digital currency?
Q.Central banks around the world are discussing and researching digital currencies that can be used in the same way as banknotes and coins.
What kind of consideration will the European Central Bank have in the future regarding the issuance of digital currencies?
A. The ECB is considering preparations for the issuance of the digital euro.
Everything around us is digitized, and we thought there would be no reason why central bank currencies would not be digitized.
We've been looking at every aspect of privacy, designing foundational programs, and using currencies for two years.
And in October this year, the ECB Board of Governors will decide whether to move to the phase of piloting digital currencies.
About BOJ Governor Ueda
Q.What is your impression of the newly appointed BOJ Governor Ueda in April?
A.I have met President Ueda several times so far, and I think he is a very calm, down-to-earth, resolute gentleman, and very good communicative skills.
The European Central Bank has built a very good relationship with his predecessor, Governor Kuroda, and I believe that such a good relationship will continue with Governor Ueda.
Under his new leadership, Governor Ueda also decided to conduct a multilateral review of the monetary easing measures taken by the Japan in order to understand the strengths and weaknesses of monetary policy, and I think it was very wise.
I made similar efforts when I started my job as Governor of the European Central Bank, and I believe that Governor Ueda has derived the best direction for maintaining price stability.
Gender disparity in Japan
Prepared from the World Economic Forum's Global Gender Gap Report (2022)
In the interview, we asked Ms. Lagarde, the world's top female leader, about women's participation in society.
Q. In the World Economic Forum's Survey on Gender Inequality, Japan ranked 146th out of 116 countries surveyed.
In the areas of political participation and economics Japan there is still a large gap between men and women.
What is your view of the current situation in Japan?
A. Women are a treasure trove of talent, energy, ability and intelligence, and if they are given the right chance, the workplace will be a better place.
However, women are still underpaid compared to men, often have unstable contracts in a short period of time, and do not have enough opportunities to reach the top of organizations.
I believe that Japan society should also face the problem of the gender gap from multiple perspectives.
I think we need to rethink why women are not able to demonstrate their talents and participate in decision-making in all aspects of the family, society, business, politics, etc.
I believe that by confronting these issues, Japan will gain as much as any other country.
Q.Why are you always energetic and able to communicate?
A.I think that I experienced a lot of sports when I was young and that my family is a big part of it.
Also, I love life.
Like the path I have taken, I want to encourage many young women by doing the best I can.
Who is Governor Lagarde?
He is 67 years old from France.
When he was a student, he was also the French representative of artistic swimming, and after that, he continued his career as a lawyer in charge of M&A such as corporate acquisitions and investments, and in 2007 he served as France's Minister of Economy, Finance, and Industry.
In 2011, she became the first woman to become the Managing Director of the IMF = International Monetary Fund. For eight years, she has responded to the Greek debt crisis and other issues, and has also actively worked to promote women's participation in society.
Since 8, she has also been the first woman to serve as President of the European Central Bank.
The European Central Bank is responsible for monetary policy in the single eurozone, including Germany and France, and is responding to record inflation in the region since Russia's invasion of Ukraine.
Ms. Lagarde is also known as a communicative person, having been selected as one of the "2019 most influential women in the world" published annually by the American economic magazine "Forbes".
Major central banks in Europe and the United States continue to raise interest rates
Major central banks in Europe and the United States continue to raise interest rates to contain inflation.
Among them, the Fed = Federal Reserve, which is the central bank of the United States, decided to raise the interest rate by 0.25% this month.
This is the 3th consecutive Fed rate hike since it lifted its zero interest rate policy in March last year, and this time the rate hike has brought the policy rate in the range of 10% to 5.5%.
The European Central Bank also decided this month to raise its key policy rate by 25.0% to 25.3%.
This is the seventh consecutive rate hike since July last year.
The Bank of England also decided to raise rates by 75.7% tonight, Japan hours, marking the 7th consecutive rate hike.
On the other hand, the Fed removed the phrase "expects further monetary tightening to be appropriate in the future" from the statement and acknowledged that Chairman Jerome Powell may pause rate hikes at the next meeting.
In addition, the European Central Bank has reduced the rate hike compared to the previous meeting, and the Bank of England has also reduced the rate hike since the March meeting, taking into account the impact of a series of bank failures in the United States and the impact of significant rate hikes on the economy.
In its latest forecast released last month (April), the IMF = International Monetary Fund lowered the global economic growth rate by 3.4 percentage point from the previous January to 1.0 percent, and predicted that it would remain at 1 percent next year.
In it, the IMF points out that the side effects of sharp rate hikes by central banks to contain inflation have become apparent.
As financial instability emerges as a cause for concern for the global economy, central banks in Europe and the United States, which have prioritized controlling inflation, are facing more difficult maneuvers than ever before.