Martin Kocher: United in diversity, constrained by heterogeneity?
Opening remarks by Mr Martin Kocher, Governor of the Oesterreichische Nationalbank, the Austrian central bank, at the Oesterreichische Nationalbank (OeNB) | SUERF Economics Conference "Monetary policy trade-offs in a heterogeneous currency area", Vienna, 18 June 2026.
Inside the monetary policy village
Across liberal democracies, diversity is celebrated as a source of strength. The European Union has even made it part of its political identity: united in diversity – in varietate concordia. In European public life, heterogeneity is therefore valued and protected.
In all of European public life, you ask? Not quite. One small monetary policy village – not in Gallia, but on the river Main – has long held out against the general enthusiasm.1 Over the last two decades, the inhabitants of this village – policymakers of the European System of Central Banks (ESCB) and their watchers – have acquired a "killjoy" reputation for viewing heterogeneity with concern.
In their defence, the villagers are suspicious of specific forms of heterogeneity – namely those believed to thwart the adequacy, the functioning and the transmission of monetary policy in the euro area.
The aim of my speech today is to take a closer look inside this village: to clarify where precisely its gloomy view of certain heterogeneities comes from, in which respects it is justified, and why some of the villagers may be taking their resistance a little too far.
The village and its reputation
Let us begin by putting the conventional narrative to the test. Is the villagers' "killjoy" reputation merely an unfounded myth? Evidence based on the ECB's own speech record suggests otherwise.
Between 1999 and 2026, more than 330 speeches by members of the ECB's Executive Board contained the words "heterogeneity", "heterogeneities" or "heterogeneous". Comparing these 330 statements with the remaining corpus of about 2,400 speeches by the ECB's Executive Board since 1999 reveals a pattern. Speeches referring to heterogeneity are systematically associated with more negative interest rate surprises than other speeches.2 Stock prices also tend to decline more in response to speeches about heterogeneity.