Miriam L. Campanella
- Published in print:
- 2000
- Published Online:
- November 2003
- ISBN:
- 9780198297574
- eISBN:
- 9780191598982
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198297572.003.0006
- Subject:
- Political Science, European Union
This chapter examines the conflict between the European Central Bank (ECB) and Council of Ministers and the Economic and Finance Ministers of the eleven countries taking part in the common currency ...
More
This chapter examines the conflict between the European Central Bank (ECB) and Council of Ministers and the Economic and Finance Ministers of the eleven countries taking part in the common currency (ECOFIN-11). The theoretical game of chicken is used to highlight the preferences of the two parties and ensuing dynamics. It is shown that the ECB’s commitment to its institutional objective counters political authorities’ attempts to gain fiscal dominance over monetary policy.Less
This chapter examines the conflict between the European Central Bank (ECB) and Council of Ministers and the Economic and Finance Ministers of the eleven countries taking part in the common currency (ECOFIN-11). The theoretical game of chicken is used to highlight the preferences of the two parties and ensuing dynamics. It is shown that the ECB’s commitment to its institutional objective counters political authorities’ attempts to gain fiscal dominance over monetary policy.
M. Galvenius and P. Mercier
- Published in print:
- 2011
- Published Online:
- May 2011
- ISBN:
- 9780199557523
- eISBN:
- 9780191725005
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199557523.003.0003
- Subject:
- Economics and Finance, Macro- and Monetary Economics, International
This chapter describes the history of the implementation technology for the Eurosystem's monetary policy. The monetary policy operational framework was developed by the European Monetary Institute ...
More
This chapter describes the history of the implementation technology for the Eurosystem's monetary policy. The monetary policy operational framework was developed by the European Monetary Institute and then by the European Central Bank. The development of the framework included the specification of the ECB's open market operations, the standing facilities, the reserve requirement system, the collateral policy, the counterparty policy, and the liquidity forecasting procedures. The work also comprised a discussion on the appropriate operational target for the Eurosystem's monetary policy as well as the development of the supporting IT systems and other infrastructure. The chapter gives insights into the debates and practical challenges involved in agreeing a framework on the basis of the different traditions and interests of the participating EU national central banks. The chapter gives a view into the complex elaboration of proposals and the decision-making processes in the European Monetary Institute and the European Central Bank. Moreover, the chapter gives a comprehensive overview of the design of the original Eurosystem framework at the time of the launch of the euro.Less
This chapter describes the history of the implementation technology for the Eurosystem's monetary policy. The monetary policy operational framework was developed by the European Monetary Institute and then by the European Central Bank. The development of the framework included the specification of the ECB's open market operations, the standing facilities, the reserve requirement system, the collateral policy, the counterparty policy, and the liquidity forecasting procedures. The work also comprised a discussion on the appropriate operational target for the Eurosystem's monetary policy as well as the development of the supporting IT systems and other infrastructure. The chapter gives insights into the debates and practical challenges involved in agreeing a framework on the basis of the different traditions and interests of the participating EU national central banks. The chapter gives a view into the complex elaboration of proposals and the decision-making processes in the European Monetary Institute and the European Central Bank. Moreover, the chapter gives a comprehensive overview of the design of the original Eurosystem framework at the time of the launch of the euro.
Christopher Taylor
- Published in print:
- 2000
- Published Online:
- November 2003
- ISBN:
- 9780198296393
- eISBN:
- 9780191599002
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198296398.003.0007
- Subject:
- Political Science, European Union
Starting from concerns at the lack of legitimacy and accountability of European monetary institutions, the author develops proposals for improving the accountability of the European Central Bank and ...
More
Starting from concerns at the lack of legitimacy and accountability of European monetary institutions, the author develops proposals for improving the accountability of the European Central Bank and embedding it in a democratic institutional context resembling that of individual member states.Less
Starting from concerns at the lack of legitimacy and accountability of European monetary institutions, the author develops proposals for improving the accountability of the European Central Bank and embedding it in a democratic institutional context resembling that of individual member states.
Alasdair Roberts
- Published in print:
- 2010
- Published Online:
- May 2010
- ISBN:
- 9780195374988
- eISBN:
- 9780199776849
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195374988.003.0002
- Subject:
- Political Science, American Politics
This chapter discusses central bank independence and why it should be regarded as an application of the logic of discipline. The argument for central bank independence mutated substantially over ...
More
This chapter discusses central bank independence and why it should be regarded as an application of the logic of discipline. The argument for central bank independence mutated substantially over thirty years. It began as a simple application of the logic of discipline: legal reforms were necessary to establish the independence of central banks so that they could make difficult decisions about monetary policy. Formal-legal reforms empowered a new guardian class of central bankers and scholarly economists. Over time the argument for independence was refined to include the claim that de jure independence would be an effective means of reassuring foreign investors about the commitment to price stability. By 2009, however, this now-conventional argument for central bank independence had been discredited in several ways. The most obvious difficulty was the failure of leading central bankers to anticipate and avoid the crisis of 2007-2009.Less
This chapter discusses central bank independence and why it should be regarded as an application of the logic of discipline. The argument for central bank independence mutated substantially over thirty years. It began as a simple application of the logic of discipline: legal reforms were necessary to establish the independence of central banks so that they could make difficult decisions about monetary policy. Formal-legal reforms empowered a new guardian class of central bankers and scholarly economists. Over time the argument for independence was refined to include the claim that de jure independence would be an effective means of reassuring foreign investors about the commitment to price stability. By 2009, however, this now-conventional argument for central bank independence had been discredited in several ways. The most obvious difficulty was the failure of leading central bankers to anticipate and avoid the crisis of 2007-2009.
Alec Stone Sweet, Wayne Sandholtz, and Neil Fligstein (eds)
- Published in print:
- 2001
- Published Online:
- April 2004
- ISBN:
- 9780199247967
- eISBN:
- 9780191601088
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/019924796X.001.0001
- Subject:
- Political Science, European Union
In 1950, a European political space existed, if only as a very primitive site of international governance. Now, at the beginning of the twenty-first century, the European Union governs in an ...
More
In 1950, a European political space existed, if only as a very primitive site of international governance. Now, at the beginning of the twenty-first century, the European Union governs in an ever-growing number of policy domains. Increasingly dense networks of transnational actors representing electorates, member state governments, firms, and specialized interests operate in arenas that are best understood as supranational. At the same time, the capacity of European organizations – the European Central Bank, the European Commission, and the European Court of Justice – to make authoritative policy decisions has steadily expanded, profoundly transforming the very nature of the European polity. This book, a companion volume and extension to European Integration and Supranational Governance (which was published in 1998), offers readers a sophisticated theoretical account of this transformation, as well as original empirical research. Like the earlier book, it was basically funded by a grant from the University of California (Berkeley) Center for German and European Studies, with additional support from the University of California (Irvine) Center for Global Peace and Conflict Studies, and the Robert Schumann Centre for Advanced Study at the European University Institute, San Domenico di Fiesole (partly through the Italian Ministry of Foreign Affairs). The authors, a small group of social scientists, collaborated for three years and met in four workshops, with penultimate versions of the papers presented at the final conference (at the Schumann Centre) forming the chapters of the book. The editors elaborate an innovative synthesis of institutionalist theory that contributors use to explain the sources and consequences of the emergence and institutionalization of European political arenas. Some chapters examine the evolution of integration and supranational governance across time and policy domain. Others recount more discrete episodes, including the development of women’s rights, the judicial review of administrative acts, a stable system of interest group representation, and enhanced cooperation in foreign policy and security; the creation of the European Central Bank; the emergence of new policy competences, such as for policing and immigration; and the multi-dimensional impact of European policies on national modes of governance.Less
In 1950, a European political space existed, if only as a very primitive site of international governance. Now, at the beginning of the twenty-first century, the European Union governs in an ever-growing number of policy domains. Increasingly dense networks of transnational actors representing electorates, member state governments, firms, and specialized interests operate in arenas that are best understood as supranational. At the same time, the capacity of European organizations – the European Central Bank, the European Commission, and the European Court of Justice – to make authoritative policy decisions has steadily expanded, profoundly transforming the very nature of the European polity. This book, a companion volume and extension to European Integration and Supranational Governance (which was published in 1998), offers readers a sophisticated theoretical account of this transformation, as well as original empirical research. Like the earlier book, it was basically funded by a grant from the University of California (Berkeley) Center for German and European Studies, with additional support from the University of California (Irvine) Center for Global Peace and Conflict Studies, and the Robert Schumann Centre for Advanced Study at the European University Institute, San Domenico di Fiesole (partly through the Italian Ministry of Foreign Affairs). The authors, a small group of social scientists, collaborated for three years and met in four workshops, with penultimate versions of the papers presented at the final conference (at the Schumann Centre) forming the chapters of the book. The editors elaborate an innovative synthesis of institutionalist theory that contributors use to explain the sources and consequences of the emergence and institutionalization of European political arenas. Some chapters examine the evolution of integration and supranational governance across time and policy domain. Others recount more discrete episodes, including the development of women’s rights, the judicial review of administrative acts, a stable system of interest group representation, and enhanced cooperation in foreign policy and security; the creation of the European Central Bank; the emergence of new policy competences, such as for policing and immigration; and the multi-dimensional impact of European policies on national modes of governance.
Kathleen R. Mcnamara
- Published in print:
- 2001
- Published Online:
- April 2004
- ISBN:
- 9780199247967
- eISBN:
- 9780191601088
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/019924796X.003.0008
- Subject:
- Political Science, European Union
An analysis is presented of the creation and development of rules governing the organizational form and the policy content of the European Central Bank (ECB). The establishment of the ECB and the ...
More
An analysis is presented of the creation and development of rules governing the organizational form and the policy content of the European Central Bank (ECB). The establishment of the ECB and the launching of the Euro constitute an extraordinary innovation, one that opens and organizes a new institutional space in Europe. The ECB system is assessed in the light of three broad theoretical approaches emphasizing, respectively, power politics, institutions as rational solutions to collective problems, and pre-existing normative (social) structures. Power politics and functional rationality approaches are found to fail to account for important aspects of the ECB’s rules and policy mandates, while, in contrast, a sociological emphasis on institutional context is useful in explaining the continuities linking the ECB to the normative structure that had previously developed – largely within the network of central-bank governors – and diffused throughout the organizational field in which monetary policy-making was embedded. It was the need to legitimize the new ECB in terms of these broader norms that shaped the ECB’s organizational structure and governing rules: in particular, pre-existing norms influenced three key aspects of the ECB – its political independence, its criteria for membership, and its rules for price stability.Less
An analysis is presented of the creation and development of rules governing the organizational form and the policy content of the European Central Bank (ECB). The establishment of the ECB and the launching of the Euro constitute an extraordinary innovation, one that opens and organizes a new institutional space in Europe. The ECB system is assessed in the light of three broad theoretical approaches emphasizing, respectively, power politics, institutions as rational solutions to collective problems, and pre-existing normative (social) structures. Power politics and functional rationality approaches are found to fail to account for important aspects of the ECB’s rules and policy mandates, while, in contrast, a sociological emphasis on institutional context is useful in explaining the continuities linking the ECB to the normative structure that had previously developed – largely within the network of central-bank governors – and diffused throughout the organizational field in which monetary policy-making was embedded. It was the need to legitimize the new ECB in terms of these broader norms that shaped the ECB’s organizational structure and governing rules: in particular, pre-existing norms influenced three key aspects of the ECB – its political independence, its criteria for membership, and its rules for price stability.
David R. Cameron
- Published in print:
- 1998
- Published Online:
- April 2004
- ISBN:
- 9780198294641
- eISBN:
- 9780191601071
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198294646.003.0007
- Subject:
- Political Science, European Union
Seeks to understand why some member‐states of the European Community attempted, with eventual success, to extend supranational authority in the domain of monetary and exchange‐rate policy and to ...
More
Seeks to understand why some member‐states of the European Community attempted, with eventual success, to extend supranational authority in the domain of monetary and exchange‐rate policy and to anticipate some of the probable consequences of such extension. It begins by analysing the beliefs that originally underpinned the attempt, concerning the perceived need to resolve the community tensions inherent in independent economic policy‐making. It then considers the economic, political and institutional dilemmas, and uncertainties likely to confront member‐states as economic integration proceeds. Concentrating on the issues of low growth and high unemployment, it assesses how far European Monetary Union is likely to provide a remedy, and whether it will be necessary or desirable to create a counterweight to the authority of the European Central Bank, and to create new supranational organizations in the domain of European macroeconomic governance.Less
Seeks to understand why some member‐states of the European Community attempted, with eventual success, to extend supranational authority in the domain of monetary and exchange‐rate policy and to anticipate some of the probable consequences of such extension. It begins by analysing the beliefs that originally underpinned the attempt, concerning the perceived need to resolve the community tensions inherent in independent economic policy‐making. It then considers the economic, political and institutional dilemmas, and uncertainties likely to confront member‐states as economic integration proceeds. Concentrating on the issues of low growth and high unemployment, it assesses how far European Monetary Union is likely to provide a remedy, and whether it will be necessary or desirable to create a counterweight to the authority of the European Central Bank, and to create new supranational organizations in the domain of European macroeconomic governance.
Trine P. Larsen and Peter Taylor-Gooby
- Published in print:
- 2004
- Published Online:
- January 2005
- ISBN:
- 9780199267262
- eISBN:
- 9780191602023
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/019926726X.003.0008
- Subject:
- Political Science, Political Economy
New social risks are at the forefront of the EU's social policy agenda. In part, this is because a new social risk approach fits with open market policies, which stress constraints on state ...
More
New social risks are at the forefront of the EU's social policy agenda. In part, this is because a new social risk approach fits with open market policies, which stress constraints on state interventions and the importance of adapting social provision to meet economic goals; in part because old social risk areas are so heavily occupied by existing national government policies that it is difficult to find support for innovations. During the 1980s and 1990s, a number of attempts to develop international policy harmonization were pursued. These failed due to the difficulty of achieving cross‐national consensus. There are a number of relevant directives, chiefly in the areas of equality of opportunity for men and women and other labour market issues. The most important current developments, however, are in the area of ‘soft law’ through the Open Method of Co‐ordination and the National Action Plans in relation to employment, social exclusion, pensions, health and social care. The European Employment Strategy, with its stress on ‘flexicurity’, is the most advanced of these. It is at present unclear to what extent this process will achieve substantial changes in comparison with the importance of the economic pressures from the Single European Market.Less
New social risks are at the forefront of the EU's social policy agenda. In part, this is because a new social risk approach fits with open market policies, which stress constraints on state interventions and the importance of adapting social provision to meet economic goals; in part because old social risk areas are so heavily occupied by existing national government policies that it is difficult to find support for innovations. During the 1980s and 1990s, a number of attempts to develop international policy harmonization were pursued. These failed due to the difficulty of achieving cross‐national consensus. There are a number of relevant directives, chiefly in the areas of equality of opportunity for men and women and other labour market issues. The most important current developments, however, are in the area of ‘soft law’ through the Open Method of Co‐ordination and the National Action Plans in relation to employment, social exclusion, pensions, health and social care. The European Employment Strategy, with its stress on ‘flexicurity’, is the most advanced of these. It is at present unclear to what extent this process will achieve substantial changes in comparison with the importance of the economic pressures from the Single European Market.
David Howarth
- Published in print:
- 2008
- Published Online:
- September 2008
- ISBN:
- 9780199535026
- eISBN:
- 9780191715860
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199535026.003.0003
- Subject:
- Political Science, Comparative Politics, European Union
Monetary integration through the Maastricht Treaty in European Union was achieved by delegation to the Commission. This was fuelled by the need for centralised expertise to coordinate complex change ...
More
Monetary integration through the Maastricht Treaty in European Union was achieved by delegation to the Commission. This was fuelled by the need for centralised expertise to coordinate complex change and the member states' desire to commit themselves to future compliance with the stability and Growth Pact rules that were agreed upon to enforce budgetary discipline. The Commission built political support for the transition to a single currency. To ensure the credibility of member government commitments to the debt and budget deficit convergence criteria, the Excessive Deficit Procedure was devised and implemented by the Commission as was the Early Warning Procedure of the Ecofin finance ministers. The European Central Bank enforced the low inflation target.Less
Monetary integration through the Maastricht Treaty in European Union was achieved by delegation to the Commission. This was fuelled by the need for centralised expertise to coordinate complex change and the member states' desire to commit themselves to future compliance with the stability and Growth Pact rules that were agreed upon to enforce budgetary discipline. The Commission built political support for the transition to a single currency. To ensure the credibility of member government commitments to the debt and budget deficit convergence criteria, the Excessive Deficit Procedure was devised and implemented by the Commission as was the Early Warning Procedure of the Ecofin finance ministers. The European Central Bank enforced the low inflation target.
Mercier Paul and Francesco Papadia
- Published in print:
- 2011
- Published Online:
- May 2011
- ISBN:
- 9780199557523
- eISBN:
- 9780191725005
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199557523.003.0001
- Subject:
- Economics and Finance, Macro- and Monetary Economics, International
The introduction clarifies the main purpose of the book: to give an analytical account of the technology for monetary policy implementation of the European Central Bank, comparing it, when useful, ...
More
The introduction clarifies the main purpose of the book: to give an analytical account of the technology for monetary policy implementation of the European Central Bank, comparing it, when useful, with the approaches of the US Federal Reserve System, the Bank of Japan, and the Bank of England. The book addresses this issue both theoretically and empirically, examining normal as well as stressed conditions. In so doing, it not only remedies a lack of attention to an important issue but it also presents a systematic treatment of the implementation of monetary policy in crisis times. The introduction also explains that the title of the book, with its reference to the concrete euro, aims at addressing the issue of how a given monetary policy stance is translated into concrete market conditions. The allusion to something as solid as concrete is also intentional. The closing section of the introduction presents the plan of the book.Less
The introduction clarifies the main purpose of the book: to give an analytical account of the technology for monetary policy implementation of the European Central Bank, comparing it, when useful, with the approaches of the US Federal Reserve System, the Bank of Japan, and the Bank of England. The book addresses this issue both theoretically and empirically, examining normal as well as stressed conditions. In so doing, it not only remedies a lack of attention to an important issue but it also presents a systematic treatment of the implementation of monetary policy in crisis times. The introduction also explains that the title of the book, with its reference to the concrete euro, aims at addressing the issue of how a given monetary policy stance is translated into concrete market conditions. The allusion to something as solid as concrete is also intentional. The closing section of the introduction presents the plan of the book.
Hal S. Scott
- Published in print:
- 2016
- Published Online:
- January 2017
- ISBN:
- 9780262034371
- eISBN:
- 9780262332156
- Item type:
- chapter
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262034371.003.0010
- Subject:
- Economics and Finance, Economic History
The Fed's three major peers are the Bank of England (BOE), the European Central Bank, and the Bank of Japan (BOJ). This chapter begins with a description of the powers of the three peer central ...
More
The Fed's three major peers are the Bank of England (BOE), the European Central Bank, and the Bank of Japan (BOJ). This chapter begins with a description of the powers of the three peer central banks. It then compares their powers with those of the Fed. It argues that institutionally the United States grants by far the weakest lender-of-last-resort (LLR) powers to its central bank, particularly with respect to nonbanks: (1) its independence is more fragile; (2) it is the only country with special limitations on lending to nonbanks as compared with banks; (3) it is the only country, outside the Eurozone, that makes no provision for loans to institutions the central bank does not judge as solvent; (4) while the BOE and BOJ require Treasury approval or direction for emergency lending, such requirements are likely to be much less politicized than the US Treasury approval of loans to nonbanks; (5) it is the only country that places restrictions on banks using discount window loans to support affiliates; (6) it is the only country requiring that there be a broad program for borrowing by nonbanks; and (7) it is the most aggressive country in requiring disclosure, thereby possibly inhibiting borrowers from borrowing due to the associated stigma. All but the first point results from changes by Dodd–Frank. This US weakness is not likely to be rectified in the near future given the politics surrounding bailouts.Less
The Fed's three major peers are the Bank of England (BOE), the European Central Bank, and the Bank of Japan (BOJ). This chapter begins with a description of the powers of the three peer central banks. It then compares their powers with those of the Fed. It argues that institutionally the United States grants by far the weakest lender-of-last-resort (LLR) powers to its central bank, particularly with respect to nonbanks: (1) its independence is more fragile; (2) it is the only country with special limitations on lending to nonbanks as compared with banks; (3) it is the only country, outside the Eurozone, that makes no provision for loans to institutions the central bank does not judge as solvent; (4) while the BOE and BOJ require Treasury approval or direction for emergency lending, such requirements are likely to be much less politicized than the US Treasury approval of loans to nonbanks; (5) it is the only country that places restrictions on banks using discount window loans to support affiliates; (6) it is the only country requiring that there be a broad program for borrowing by nonbanks; and (7) it is the most aggressive country in requiring disclosure, thereby possibly inhibiting borrowers from borrowing due to the associated stigma. All but the first point results from changes by Dodd–Frank. This US weakness is not likely to be rectified in the near future given the politics surrounding bailouts.
Uwe Puetter
- Published in print:
- 2006
- Published Online:
- July 2012
- ISBN:
- 9780719074035
- eISBN:
- 9781781701553
- Item type:
- book
- Publisher:
- Manchester University Press
- DOI:
- 10.7228/manchester/9780719074035.001.0001
- Subject:
- Political Science, European Union
This book a study on the work of the Eurogroup—monthly informal meetings between euro area finance ministers, the Commission and the European Central Bank. It demonstrates how this small, secretive ...
More
This book a study on the work of the Eurogroup—monthly informal meetings between euro area finance ministers, the Commission and the European Central Bank. It demonstrates how this small, secretive circle of senior decision-makers shapes European economic governance through a routinised informal policy dialogue. Although the role of the Eurogroup has been contested since before the group's creation, its actual operation has never been subject to systematic evaluation. This book opens the doors of the meeting room and shows how an understanding of the interplay of formal provisions and informal processes is pivotal to the analysis of euro area governance. The book advances the conceptual understanding of informal negotiations among senior European and national decision-makers, and provides an in-depth analysis of historical episodes of policy coordination. As other areas of European decision-making rely increasingly on informal, voluntary policy coordination amongst member states, the Eurogroup model can be seen as a template for other policy areas.Less
This book a study on the work of the Eurogroup—monthly informal meetings between euro area finance ministers, the Commission and the European Central Bank. It demonstrates how this small, secretive circle of senior decision-makers shapes European economic governance through a routinised informal policy dialogue. Although the role of the Eurogroup has been contested since before the group's creation, its actual operation has never been subject to systematic evaluation. This book opens the doors of the meeting room and shows how an understanding of the interplay of formal provisions and informal processes is pivotal to the analysis of euro area governance. The book advances the conceptual understanding of informal negotiations among senior European and national decision-makers, and provides an in-depth analysis of historical episodes of policy coordination. As other areas of European decision-making rely increasingly on informal, voluntary policy coordination amongst member states, the Eurogroup model can be seen as a template for other policy areas.
C. Randall Henning and Sophie Meunier
- Published in print:
- 2005
- Published Online:
- February 2006
- ISBN:
- 9780199283958
- eISBN:
- 9780191603297
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199283958.003.0004
- Subject:
- Political Science, European Union
In economic relations, the EU has the capacity to exercise a global role on par with the United States. Yet the EU is not always able to effectively defend its interests. While the EU has firmly ...
More
In economic relations, the EU has the capacity to exercise a global role on par with the United States. Yet the EU is not always able to effectively defend its interests. While the EU has firmly established its role as a global player in trade, it has faced difficulties in acquiring such a role in money and finance. Institutional legacies best explain this uneven progress. EU trade policy-making is centralized, whereas centralization is incomplete in the area of money and finance. Power struggles among the various EU bodies and member-states hamper effectiveness.Less
In economic relations, the EU has the capacity to exercise a global role on par with the United States. Yet the EU is not always able to effectively defend its interests. While the EU has firmly established its role as a global player in trade, it has faced difficulties in acquiring such a role in money and finance. Institutional legacies best explain this uneven progress. EU trade policy-making is centralized, whereas centralization is incomplete in the area of money and finance. Power struggles among the various EU bodies and member-states hamper effectiveness.
Charles M. Kahn and João A. C. Santos
- Published in print:
- 2004
- Published Online:
- August 2004
- ISBN:
- 9780199271405
- eISBN:
- 9780191601200
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199271402.003.0017
- Subject:
- Economics and Finance, Economic Systems
The Maastricht Treaty created the European System of Central Banks and the European Central Bank (ECB) to head the system. The treaty entrusts the ECB with the responsibility for monetary policy, but ...
More
The Maastricht Treaty created the European System of Central Banks and the European Central Bank (ECB) to head the system. The treaty entrusts the ECB with the responsibility for monetary policy, but national authorities remain responsible for financial stability. In this chapter, we focus on the implications of national versus central assignment of lender-of-last-resort and supervisory functions for the degree of forbearance in closing distressed banks and for the level of diligence in bank supervision. One major conclusion is that, if only one of the two functions is centralized, then it will be more effective to centralize the supervisory function.Less
The Maastricht Treaty created the European System of Central Banks and the European Central Bank (ECB) to head the system. The treaty entrusts the ECB with the responsibility for monetary policy, but national authorities remain responsible for financial stability. In this chapter, we focus on the implications of national versus central assignment of lender-of-last-resort and supervisory functions for the degree of forbearance in closing distressed banks and for the level of diligence in bank supervision. One major conclusion is that, if only one of the two functions is centralized, then it will be more effective to centralize the supervisory function.
Tommaso Padoa-Schioppa
- Published in print:
- 2000
- Published Online:
- November 2003
- ISBN:
- 9780199241767
- eISBN:
- 9780191596742
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199241767.001.0001
- Subject:
- Economics and Finance, Macro- and Monetary Economics
This is a guide to the processes that led to the creation of the European single market and the signing of the Maastricht Treaty in 1992. The 2000 edition has only a few changes, but has been ...
More
This is a guide to the processes that led to the creation of the European single market and the signing of the Maastricht Treaty in 1992. The 2000 edition has only a few changes, but has been expanded six years after the original publication date to assess the economic, monetary, political, and institutional significance of the euro. It also reconsiders the rationale and underlying philosophy of European Monetary Union (EMU) in the light of the developments of the previous decade. A central theme is the proposition that a group of sovereign countries cannot for long sustain free trade, unrestricted capital movements, fixed exchange rates, and full autonomy of national macroeconomic policies, so they need to move towards monetary union and a single currency. Issues that are extensively discussed include the single currency, the tasks of a European Central Bank (ECB), the European Currency Unit (ECU), the role of budgetary rules, currency competition, and the relationship between the EMU and political union. Appendices contain extracts from official documents dealing with EMU and an extensive chronology. The book is directed at academic and business economists interested in the issues surrounding EMU, commentators, and policy‐makers.Less
This is a guide to the processes that led to the creation of the European single market and the signing of the Maastricht Treaty in 1992. The 2000 edition has only a few changes, but has been expanded six years after the original publication date to assess the economic, monetary, political, and institutional significance of the euro. It also reconsiders the rationale and underlying philosophy of European Monetary Union (EMU) in the light of the developments of the previous decade. A central theme is the proposition that a group of sovereign countries cannot for long sustain free trade, unrestricted capital movements, fixed exchange rates, and full autonomy of national macroeconomic policies, so they need to move towards monetary union and a single currency. Issues that are extensively discussed include the single currency, the tasks of a European Central Bank (ECB), the European Currency Unit (ECU), the role of budgetary rules, currency competition, and the relationship between the EMU and political union. Appendices contain extracts from official documents dealing with EMU and an extensive chronology. The book is directed at academic and business economists interested in the issues surrounding EMU, commentators, and policy‐makers.
Hans-Werner Sinn
- Published in print:
- 2014
- Published Online:
- October 2014
- ISBN:
- 9780198702139
- eISBN:
- 9780191771828
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198702139.001.0001
- Subject:
- Economics and Finance, Macro- and Monetary Economics
This book offers a critical assessment of the history of the euro, its crisis and the rescue measures taken by the European Central Bank and the community of states, above all the extra refinancing ...
More
This book offers a critical assessment of the history of the euro, its crisis and the rescue measures taken by the European Central Bank and the community of states, above all the extra refinancing credit provided by local central banks (Target credit) which dwarfs all other rescue credits. The euro induced huge capital flows from the northern to the southern countries of the Eurozone that triggered an inflationary credit bubble in the latter, deprived them of their competitiveness, and made them vulnerable to the financial crisis that spilled over from the US in 2007 and 2008. As private capital shied away from the southern countries, the ECB helped out by providing credit from the local money-printing presses. The ECB became heavily exposed to investment risks in the process, and subsequently had to be bailed out by intergovernmental rescue operations that provided replacement credit for the ECB credit, which itself had replaced the dwindling private credit. The interventions stretched the legal strictures stipulated by the Maastricht Treaty which, in the absence of a European federal state, had granted the ECB a very limited mandate. These interventions created a path dependency that effectively made parliaments vicarious agents of the ECB’s Governing Council. This book describes what the author considers to be a dangerous political process that undermines both the market economy and democracy, without solving southern Europe’s competitiveness problem.Less
This book offers a critical assessment of the history of the euro, its crisis and the rescue measures taken by the European Central Bank and the community of states, above all the extra refinancing credit provided by local central banks (Target credit) which dwarfs all other rescue credits. The euro induced huge capital flows from the northern to the southern countries of the Eurozone that triggered an inflationary credit bubble in the latter, deprived them of their competitiveness, and made them vulnerable to the financial crisis that spilled over from the US in 2007 and 2008. As private capital shied away from the southern countries, the ECB helped out by providing credit from the local money-printing presses. The ECB became heavily exposed to investment risks in the process, and subsequently had to be bailed out by intergovernmental rescue operations that provided replacement credit for the ECB credit, which itself had replaced the dwindling private credit. The interventions stretched the legal strictures stipulated by the Maastricht Treaty which, in the absence of a European federal state, had granted the ECB a very limited mandate. These interventions created a path dependency that effectively made parliaments vicarious agents of the ECB’s Governing Council. This book describes what the author considers to be a dangerous political process that undermines both the market economy and democracy, without solving southern Europe’s competitiveness problem.
Paul Mercier and Francesco Papadia (eds)
- Published in print:
- 2011
- Published Online:
- May 2011
- ISBN:
- 9780199557523
- eISBN:
- 9780191725005
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199557523.001.0001
- Subject:
- Economics and Finance, Macro- and Monetary Economics, International
This book gives an analytical account of the technology for the monetary policy implementation of the European Central Bank. The issue is looked at from different perspectives, corresponding to ...
More
This book gives an analytical account of the technology for the monetary policy implementation of the European Central Bank. The issue is looked at from different perspectives, corresponding to different chapters. The first chapter addresses the issue from a theoretical point of view, taking both a positive and a normative approach and considering both normal and stressed conditions. The stabilization of a short-term rate of interest in normal conditions and the countering of liquidity risk in a financial crisis are considered the objectives of monetary policy implementation. The approach in the second chapter is historical, presenting a narrative of the creation of the framework for the implementation of monetary policy in the euro area. The analysis turns to empirical tools in the third chapter, where the experience of actually working with the technology for monetary policy implementation is dealt with. Finally a forward-looking approach is taken in the last, short chapter, which attempts to identify the future challenges of monetary policy implementation. Each chapter, except for the fourth, is written by different authors but both the editors and the authors have strived to present an organic analysis of the issue in which the different approaches complement each other. The book is by no means an official account, but could definitely not have been written had the authors not been so closely associated with the implementation of monetary policy in the euro area.Less
This book gives an analytical account of the technology for the monetary policy implementation of the European Central Bank. The issue is looked at from different perspectives, corresponding to different chapters. The first chapter addresses the issue from a theoretical point of view, taking both a positive and a normative approach and considering both normal and stressed conditions. The stabilization of a short-term rate of interest in normal conditions and the countering of liquidity risk in a financial crisis are considered the objectives of monetary policy implementation. The approach in the second chapter is historical, presenting a narrative of the creation of the framework for the implementation of monetary policy in the euro area. The analysis turns to empirical tools in the third chapter, where the experience of actually working with the technology for monetary policy implementation is dealt with. Finally a forward-looking approach is taken in the last, short chapter, which attempts to identify the future challenges of monetary policy implementation. Each chapter, except for the fourth, is written by different authors but both the editors and the authors have strived to present an organic analysis of the issue in which the different approaches complement each other. The book is by no means an official account, but could definitely not have been written had the authors not been so closely associated with the implementation of monetary policy in the euro area.
DAVID MCKAY
- Published in print:
- 1999
- Published Online:
- October 2011
- ISBN:
- 9780198296775
- eISBN:
- 9780191685279
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198296775.003.0007
- Subject:
- Political Science, European Union
This chapter attempts to apply some of the theories described to the European context. The main argument is that most of the scenarios provided by a range of respected economists will generate ...
More
This chapter attempts to apply some of the theories described to the European context. The main argument is that most of the scenarios provided by a range of respected economists will generate pressures for the improvement of the economic role of the centre including fiscal centralization. In addition, economists' analyses of the functioning of the European Central Bank (ECB) and the Stability Pact, suggest that within the European Monetary Union (EMU) area the relationship between fiscal and monetary policy will become central to economic strategy. It specifically summarizes the policy implications of competing economic scenarios and places these implications in political context by evaluating the capacity of the European Union (EU) institutional structure and especially the European party system to accommodate them. Relevant survey data on levels of support for EU institutions is also explained. There is little evidence to suggest that, as a whole, the peoples of Europe have obtained a level of identity with European institutions that is in any way equivalent to their identification with existing nation states and regions.Less
This chapter attempts to apply some of the theories described to the European context. The main argument is that most of the scenarios provided by a range of respected economists will generate pressures for the improvement of the economic role of the centre including fiscal centralization. In addition, economists' analyses of the functioning of the European Central Bank (ECB) and the Stability Pact, suggest that within the European Monetary Union (EMU) area the relationship between fiscal and monetary policy will become central to economic strategy. It specifically summarizes the policy implications of competing economic scenarios and places these implications in political context by evaluating the capacity of the European Union (EU) institutional structure and especially the European party system to accommodate them. Relevant survey data on levels of support for EU institutions is also explained. There is little evidence to suggest that, as a whole, the peoples of Europe have obtained a level of identity with European institutions that is in any way equivalent to their identification with existing nation states and regions.
Stephen G. Cecchetti and Kermit L. Schoenholtz
- Published in print:
- 2010
- Published Online:
- February 2013
- ISBN:
- 9780226012834
- eISBN:
- 9780226012858
- Item type:
- chapter
- Publisher:
- University of Chicago Press
- DOI:
- 10.7208/chicago/9780226012858.003.0010
- Subject:
- Economics and Finance, International
This chapter opens up with a brief history of the challenges that people faced who forged the policies of the European Central Bank (ECB) in its first decade. The ECB faced challenges in retaining ...
More
This chapter opens up with a brief history of the challenges that people faced who forged the policies of the European Central Bank (ECB) in its first decade. The ECB faced challenges in retaining public support for its own policies and in promoting the structural reforms needed to increase the flexibility of member economies. The ECB itself has been an excellent source, reflecting its admirable penchant for self-assessment. This chapter discusses the initial conditions in 1998 and the challenges that participants expected as the monetary union was getting under way. The construction of the ECB's operational framework, including the creation of the euro area money market as well as the initial implementation of the policy and communication strategies, is analyzed. It then proceeds to an evaluation of ECB policy performance in the first decade of monetary union. Furthermore, this chapter shows that, as the euro area expands, the addition of new constituencies that speak different languages and have different customs and histories will complicate communication further.Less
This chapter opens up with a brief history of the challenges that people faced who forged the policies of the European Central Bank (ECB) in its first decade. The ECB faced challenges in retaining public support for its own policies and in promoting the structural reforms needed to increase the flexibility of member economies. The ECB itself has been an excellent source, reflecting its admirable penchant for self-assessment. This chapter discusses the initial conditions in 1998 and the challenges that participants expected as the monetary union was getting under way. The construction of the ECB's operational framework, including the creation of the euro area money market as well as the initial implementation of the policy and communication strategies, is analyzed. It then proceeds to an evaluation of ECB policy performance in the first decade of monetary union. Furthermore, this chapter shows that, as the euro area expands, the addition of new constituencies that speak different languages and have different customs and histories will complicate communication further.
Dermot Hodson
- Published in print:
- 2012
- Published Online:
- January 2013
- ISBN:
- 9780199604104
- eISBN:
- 9780191741531
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199604104.003.0009
- Subject:
- Political Science, European Union
Economic and Monetary Union (EMU) embodies an approach to policy-making that is both highly centralized and highly decentralized. In the monetary sphere, member states share a single monetary policy, ...
More
Economic and Monetary Union (EMU) embodies an approach to policy-making that is both highly centralized and highly decentralized. In the monetary sphere, member states share a single monetary policy, but national central banks play a key role in the decision-making structures of the European Central Bank. In the economic sphere, member states retain the final say over the formulation and implementation of fiscal policies. This chapter explores the origins of this paradoxical approach to policy-making and its implications for the smooth functioning of the single currency. Its central argument is that EMU’s institutional design is the result of pulling and hauling between national central banks on the one hand and national governments on the other. Though the euro area faces pressure to centralize economic policy in the light of the global financial crisis, the intergovernmental bargain on which EMU rests shows few signs of shifting in this direction.Less
Economic and Monetary Union (EMU) embodies an approach to policy-making that is both highly centralized and highly decentralized. In the monetary sphere, member states share a single monetary policy, but national central banks play a key role in the decision-making structures of the European Central Bank. In the economic sphere, member states retain the final say over the formulation and implementation of fiscal policies. This chapter explores the origins of this paradoxical approach to policy-making and its implications for the smooth functioning of the single currency. Its central argument is that EMU’s institutional design is the result of pulling and hauling between national central banks on the one hand and national governments on the other. Though the euro area faces pressure to centralize economic policy in the light of the global financial crisis, the intergovernmental bargain on which EMU rests shows few signs of shifting in this direction.
