Christine Lagarde: Turning size into scale - Europe's new growth model
Acceptance speech by Ms Christine Lagarde, President of the European Central Bank, for the 2026 Paul A Volcker Lifetime Achievement Award at the 42nd Annual NABE Economic Policy Conference, Washington DC, 23 February 2026.
The views expressed in this speech are those of the speaker and not the view of the BIS.
There is perhaps no greater question in political philosophy than whether history is shaped by individuals or by the forces that carry them. Tolstoy devoted the philosophical heart of War and Peace to this question.
His answer was uncompromising: the so-called great men of history were not its authors but its instruments.
This is a powerful thesis. But in the history of economic institutions, the evidence points both ways. Institutions are shaped by the laws they are built upon and the mandates they are given. But they are also shaped, sometimes decisively, by the people who serve them.
Perhaps nowhere is this clearer than in the story of Paul Volcker, whom this lecture honours.
What Volcker did in the early 1980s went beyond taming inflation. He transformed the character of the Federal Reserve System. Before he came along, the Fed's independence had been established in principle by the US Treasury-Federal Reserve Accord in 1951, but it had not always been defended with equal vigour.
Arthur Burns had given a lecture on what he called "the anguish of central banking" – an argument, in essence, on why central banks could not be expected to control inflation against the weight of political pressure.
Volcker offered no such apology. He raised rates to levels that induced the deepest recession since the 1930s and came under sustained political attack.
His act of personal conviction changed the trajectory of central banking not only in the United States, but worldwide. It is the same tradition that Jay Powell has upheld with such resolve.