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This paper analyzes the legal position of the European Central Bank (ECB) within the context of contemporary social conditions, focusing on the ECB’s tendency to expand its competencies and the judicial evaluation of the current monetary legislation in the practice of the European Court of Justice (ECJ). In this sense, the paper analytically examines the concept and characteristics of monetary disputes, while exploring the ECB’s contribution to democratic monetary governance through respect for the rule of law. The author pays special attention to the ECB’s role in protecting human rights, specifically considering the trend towards a so-called “humane approach” to monetary management, which has significant consequences for the preservation of monetary stability as a public good. Using the dogmatic, comparative, and axiological methods, the author aims to highlight the main dilemmas in this area from the perspective of de lege lata and possibly offer certain guidelines for de lege ferenda.

The scientific article is devoted to the study of the principles of independence and accountability in the activities of the European Central Bank and the central bank of the EU member state. The article focuses attention on Art. 108 and Art. 109 of the Treaty on the Establishment of the European Community, which is an integral part of the Treaty on the European Union, which contain norms according to which both the European Central Bank and the central banks of the EU member states must be independent, and on the national legislation of the EU member states and Ukraine, according to which national banks are economically independent bodies. It was established that the principle of independence in the activities of the European Central Bank presupposes the absence of external and internal influence on the part of EU institutions, their employees, members of the governments of the EU member states on decision-making by the European Central Bank, but the principle of independence in the activities of the European Central Bank does not include the prohibition of free exchange opinions between the above­mentioned subjects and the European Central Bank within the framework of the existing EU institutional mechanism. Doctrinal approaches to the principles of independence and accountability in the activities of national banks of states are analyzed. It is argued that the degree of independence of one or another branch of state power cannot be an object for comparison with the central bank of the state, since this contradicts the content of the very principle of independence of one or another branch of government, and also levels the system of checks and balances as such - the Central Bank of the State does not belong to any of the three branches of state power and is not the fourth branch of power, although it is a special central body of state administration. The central bank of the state cannot be isolated from other bodies of state power - on the contrary, in the balancing of state powers between the bodies of state power, its importance is no less important, but this does not give grounds for classifying it as one of the three branches state power to separate into the fourth branch of power. It has been established that in the legal literature the principle of independence in the activities of the Central Bank of the State is identified with functional and/or legal autonomy. An argument is given that refutes this approach. The principle of independence in the activity of the Central Bank of the EU member state is characterized. It was established that the principle of accountability corresponds to the principle of independence in the activities of the Central Bank of the State. This principle is characterized.

The subject matter of analysis in this paper is the cohesion policy in the discourse of the Law of the European Central Bank (ECB), which will be reviewed for the purpose of establishing changes in the values and principles of cohesion policy which significantly redefined the postulates of the contemporary EU monetary legislation in the circumstances of the COVID-19 pandemic crisis. In that regard, the paper aims to analytically examine the characteristics and qualitative influence of the tendency to “humanize” the contemporary monetary legislation, as well as the sophisticated modus operandi of shaping the monetary authority by public law in the architecture of the European Economic and Monetary Union (EMU). By applying the dogmatic, axiological, and comparative law method, the author identifies the greatest dilemmas encountered by the European legislator in the context of adjusting the ECB regulatory activity and its primary tasks to the principles of cohesion policy. [ABSTRACT FROM AUTHOR]

There is a noted rise in research examining the influence of digital transformation—specifically the application of Distributed Ledger Technology (DLT) on the progression of the financial sector. This paper presents conclusions from a study on participants' awareness, understanding, and intentions regarding cryptocurrencies and the Digital Euro. Participants have a relatively high awareness of digital assets and Digital Euro, but better understanding is needed through effective communication and educational initiatives. While recognizing cryptocurrencies as valuable investments, participants are skeptical about their use for payments due to concerns about illicit activities. Regulatory frameworks are deemed important to address these concerns. Participants support the introduction of the Digital Euro and intend to use it for various purposes, suggesting potential demand. Desired characteristics include privacy, ease of use, and cross-border usability. These findings inform the strategies for introducing and accepting the Digital Euro, promoting financial inclusion, and enhancing accessibility in Europe's digital economy.

Worldwide, inflation is one of the most used terms when discussing the economy and beyond. Inflation is the indicator that governments, the population, financial entities, investors and not least monetary authorities are interested in. Since central banks have price stability as their main objective or not, they act through monetary policies when necessary. Monetary decisions in the Eurozone and the United States - as financially important regions - influence other economies. This paper focuses on the study of the evolution of the inflation rate in these two cases because of the importance of the subject. It will be found that inflation can also be a challenge for these large financial entities – Federal Reserve System and European Central Bank.

In its 2021 strategy review, the European Central Bank's Governing Council unanimously decided to make climate change one of its priorities for the coming years. In this article, we try to understand how this change was achieved. To do so, we rely on mixed methods, studying ECB policies, speeches, exchanges with the European Parliament, and conducting semi-structured interviews. We present a detailed account of the rapid changes within the ECB regarding the climate challenge, and attempt to unpack its conditions of possibility. We show that climate integration results from the combination and hybridisation of internal dynamics and external pressures. On the one hand, the renewal of the Executive Board and modifications in organisational dynamics secured a growing coalition for a change. On the other, pressures from politicians, NGOs, academics and citizens pushed the institution to develop its expertise and provided willing insiders with further argumentative resources to push their green agenda. While these two intertwined dynamics have allowed 'green doves' to forge a consensus around the climate action plan, disagreements remain within the Governing Council on the scope and shape of future greening efforts. [ABSTRACT FROM AUTHOR]

The aim of the undertaken research is an attempt to explain, on theoretical and empirical grounds, the interdependence between central bank communication, its transparency credibility and,consequently, the effectiveness of monetary policy pursued by central banks. The study used research methods based on the literature analysis on the subject in the field of banking and finance, as well as statistical and econometric methods (Granger causality analysis and the generalised linear model – GLM). Literature studies are aimed at answering the question of what is the relationship between the transparency, credibility of the central bank and the effectiveness of monetary policy in theoretical terms. However, the empirical research studies aim to confirm the hypothesis (H0) or reject the hypothesis (H1) about the causal relationships between the variables mentioned. Empirical analyses were conducted on the example of the European Central Bank, which, from the point of view of its monetary policy, is characterised by relatively high efficiency, relatively effectively stabilising inflation in the monetary union. All statistics used in the study were taken from databases of the International Monetary Fund (IMF World Economic Outlook), the European Union statistical office (Eurostat) and the Organisation for Economic Cooperation and Development (OECD) (OECD Data). The analysis covers the period from 2010 to 2022 based on monthly data. The results of the research confirmed the existence of the null hypothesis (i.e., the significant impact of communication, transparency and credibility of the European Central Bank on the effectiveness of monetary policy in the Euro area). The results of the conducted research may be a starting point for further, more in-depth research on the relationship between communication, transparency, credibility and effectiveness of central banks in countries with different levels of economic development.

Is the European Central Bank (ECB) increasingly acting on political – rather than technocratic – considerations? This question is of a central concern to students of European Union (EU) political economy. This article contributes to this debate by studying the ECB's credit lines to the central banks of EU member states outside the Euro Area during the Global Financial Crisis and the COVID-19 crisis. Both times the ECB accorded selectively better borrowing conditions to some central banks. The article finds that its selection of who gets favourable borrowing terms has indeed become more political. In 2008, the ECB decided the credit terms based on technocratic criteria, but twelve years later, it granted better lending conditions to countries that were close to adopting the euro. How the ECB balances its mandate for price stability in the Euro Area and its role as a supranational EU institution decides whether it will become more politicised. [ABSTRACT FROM AUTHOR]

Central bank communication plays a crucial role in the conduct of monetary policy, yet the research on central bank communication, while growing, is still scarce. In this paper, we analyze the communication reaction function of the European Central Bank (ECB) through topic-based indices derived from the bank’s speeches. These indices are used as dependent variables in policy and communication reaction function models, as suggested by recent literature. The topics are extracted using Latent Dirichlet Allocation (LDA), a popular text mining algorithm for topic extraction. The ECB has recently reviewed its monetary policy strategy, which led to an increase in studies incorporating the new methods offered by text mining for analyzing the policy reaction function of the bank. We show how indices built through topic modelling can be used to study the communication reaction function of a central bank, and we examine which variables are significant for every topic communicated by the ECB.

Amidst climate change, central banks’ roles have broadened, encompassing new responsibilities beyond tradition through widening interventions. This expansion offers institutional prospects yet could entail reputational risks in reconciling long-standing and evolving responsibilities. Despite widening interventions’ reputational risks, a comprehensive understanding of how these shape banks’ behaviour – preserving existing reputations, fostering new ones, or achieving a compatible integration of both – is lacking. To obtain a better understanding of these dynamics, we draw on bureaucratic reputation theory to examine the climate engagement of the European Central Bank (ECB). Utilising a three-fold frame analysis, we examine the ECB’s communication about its greening agenda, complemented by interview data from stakeholders. Our analysis indicates that the reputation management strategy of the ECB, amidst widening interventions, encompasses the simultaneous presence of three frames – prudence, promotion, and strategic ambiguity. Leveraging the three frames, the ECB engages in reputational pragmatism to navigate diverse audience expectations, conflicting priorities, and mitigate potential reputational risks. [ABSTRACT FROM AUTHOR]

The COVID-19 pandemic triggered a major economic crisis worldwide. The monetary policy response of the European Central Bank (ECB) was fast and massive. The ECB also intervened on the supervisory side because, after the establishment of Banking Union, the ECB was given responsibility for banking supervision in the euro area through the Single Supervisory Mechanism (SSM). This paper explains the response of the ECB-SSM to the COVID-19 related economic crisis during 2020 and 2021, up until February 2022. These ECB actions include the reduction of bank capital buffers, the redefinition of non-performing loans, and the limitations on dividends and bonuses paid by banks. We adopt a neofunctionalist approach, which suggests that policies are developed at the EU level in response to need, whereby supranational actors and spillovers are particularly important. We offer some concluding insights into whether the ECB-SSM's responses have led to a further deepening of integration. [ABSTRACT FROM AUTHOR]

Central bank communication has changed over the years, following the trend of digitalization. It has been used as a tool for the implementation of monetary policies since the 1990s, when central banks started publishing their inflation reports, outlooks, and meeting minutes on the road towards greater transparency, and to help meet their price stability mandate. This mandate cannot be achieved through traditional financial instruments alone, so digital communication and marketing has become an economic policy tool. The effectiveness of the European Central Bank’s online communication tools will be tested via a GAP model, by applying an adapted version of the servuction scale to the Bank and disseminating it to 500 citizens, with the purpose of measuring citizen satisfaction with its website and communications. The servuction model focuses on high quality services that are perceived as such by private sector customers, having a strong marketing component. The originality of the research consists in adapting it to the public sector, more specifically to central banks, and by treating citizens as customers throughout the study. The model was successfully applied to the European Central Bank, demonstrating that citizens’ expectations are highest regarding both the reliability and assurance dimensions, meaning that they want to feel confident in ECB actions, and to the understandability dimension of its online content. The largest gaps between citizens’ expectations and perceptions were identified within the efficiency, understandability, and empathy dimensions. In future, the study can be replicated and adapted to both national central banks and private banks within the European Union, assessing how citizens perceive their websites, communication, and marketing strategies, with the purpose of improving the latter two, and increasing civic engagement. The model can also be adapted to narrower topics relating to sustainable digital development, such as the expectations and perceptions of citizens with regards to central bank digital currencies.

This article evaluates the role of the ECB in response to COVID19. The article assess this response in light of the separation of economic and monetary policy. It concludes that the ECB has responded in a more conservative manner during the COVID19 crisis. The ECB did however confirm its willingness to respond to an economic crisis. The ECB has confirmed this willingness by generating a framework of different policy options. This article then concludes that whilst these policies deviate from a very conservative central bank, they are not perse illegal. There is however some indication that the ECB is deviating from its capital key and thereby violating important rules. This violation may erode some of its legitimacy. This article further briefly assesses whether these changes should be considered permanent. Based upon the structure of policies that the ECB is creating these measures indicate permanence. [ABSTRACT FROM AUTHOR]

Policy agendas are a well-studied institutional level phenomenon that capture the set of policy issues that an institution pays attention to over time. They are emergent in nature in that individual behaviour shapes institutional level outcomes when policy makers allocate attention to policy issues. To examine the link between individual-level actions and system-level outcomes we introduce the concept of the agenda-setting constellation, defined as a group of policy makers paying attention to a set of policy issues. Taking the European Central Bank as a case study, and using a combination of text-analysis and networks-analysis techniques, we demonstrate how these meso-level structures shape the evolving policy agenda. We then examine the roles of personal experience, institutional constraints, and policy context in driving agenda-setter constellation membership. Our results show the value of studying policy agendas as networked processes and the key role that agenda-setter constellations play in driving policy agenda dynamics. [ABSTRACT FROM AUTHOR]

Does culture have a causal effect on institutional trust? We answer this question by assessing the non-economic determinants of public trust in the European Central Bank. To analyse institutional trust, we employ a novel dataset of citizen perceptions and knowledge about the European Central Bank. Cultural traits are measured by indicators of social trust at the level of Euro area sub-national regions. We show that individuals living in regions with lower social trust systematically exhibit less trust in the European Central Bank. An instrumental variable approach based on historical variables of education and political institutions supports a causal interpretation of our findings. These results are robust across different model specifications and measures of trust. [ABSTRACT FROM AUTHOR]

Parliamentary hearings are a fundamental tool to hold independent central banks accountable. However, it is not clear what type of information central banks provide when they communicate with parliaments. In this article, we compare the communication of the European Central Bank (ECB) in parliamentary hearings to its communication in the press conferences. Using text analysis on the ECB President's introductory statements in parliamentary hearings and press conferences from 1998 to 2021, we show that the ECB uses hearings to discuss topics that are less covered in press conferences. We also find that the ECB's policy stance in the hearings tend to reflect the stance in press conferences, and that the degree of language complexity is similar in the two fora. These findings suggest that the ECB mainly uses parliamentary hearings to further explain policy decisions first presented at press conferences but also to put them in a broader context. [ABSTRACT FROM AUTHOR]

This article shows how the European Central Bank (ECB) reduced the risk of politicization and de facto de‐delegation despite experiencing contestation. During the euro area crisis and the coronavirus emergency the ECB's monetary policy measures have been widely praised for their effectiveness. Even though the ECB is an independent trustee that cannot be easily sanctioned, it needs to engage with its principals to receive their political backing for common projects and in order to reaffirm its own centrality in governance. This article identifies different trustee strategies to reduce politicization and thereby to decrease the risk of de facto de‐delegation: (i) dualism, (ii) voluntary self‐restraint, and (iii) changing the yard stick. It concludes by showing that the ECB has expanded its monetary policy toolbox without triggering neither formal nor de facto de‐delegation. [ABSTRACT FROM AUTHOR]

In May 2020, a ruling of the German Federal Constitutional Court (FCC) questioned the legality of the Bundesbank’s participation in the European Central Bank’s (ECB’s) Public Sector Purchase Programme. Applying elements of a principal-agent analysis, this article analyses how the FCC ruling presents us with a new understanding of the relationship between the ECB, other EU institutions and Eurozone member states. Existing principal-agent analyses of the ECB focus upon its relations with other EU-level institutions and point to the limited ex ante control mechanisms and efforts to reinforce ex post control mechanisms—notably European Parliament oversight. The FCC ruling and the ECB’s reaction demonstrate the relative importance of national level controls over the ECB agent. This article understands the role of private plaintiffs in Germany as a form of ‘fire alarm’ on ECB policymaking against the background of weak ex post controls at the EU-level.

Monetary policies are not usually considered as part of the repertoire of 'state capitalism'. However, unconventional monetary operations performed by central banks in recent years make this exclusion increasingly problematic. This paper thus explores whether recent central bank interventions should be considered manifestations of 'new' state capitalism. Analysis focuses on the actions of three central banks from the advanced capitalist core in the West – the US Federal Reserve, the European Central Bank and the Bank of England. By mobilising the 'financial chains' perspective, this paper highlights the fact that, under financialisation, contemporary central banks have assumed a pivotal role in shaping Western capitalism and its uneven geographies. Through these recent unconventional interventions, central banks have in effect become 'creators' or 'generators' of (financial) capital. As such, their role in shaping uneven economic geographies across space (well beyond their official territorial boundaries) has expanded. Spatial ramifications of central banks' capital-generating operations could thus fit easily within the framework of 'uneven and combined state capitalism'. The possibility of considering the unconventional operations of central banks as state capitalist could also go hand in hand with a modified definition of state capitalism. Indeed, the rubric of state capitalism could potentially be enlarged to include configurations of capitalism where the state plays a particularly strong role not only as promoter, supervisor and owner of capital but also as a 'generator' of capital. This capital-generating role appears to be essential for the survival of contemporary capitalism. [ABSTRACT FROM AUTHOR]

The article is aimed at studying the experience of using the non-traditional monetary policy by the European Central Bank. The standard instruments of monetary policy of the European Central Bank are provided: open market transactions, permanent operating mechanisms, and minimal redundancy on the accounts of central banks. The relationship between the accounting rate and the level of inflation in the Eurozone is determined by means of correlation analysis. The correlation ratio is 0.71, indicating the impact of the accounting rate on the level of inflation, albeit with a certain time lag. The impact of the long-term interest rates on government bonds on the rate of GDP growth in the Eurozone countries is considered. A calculation of the pair correlation ratio between these indicators showed that the correlation ratio is 0.00468, i.e., interest rates on government long-term bonds in the Eurozone do not affect the change in GDP growth. It is determined that during the last global financial crisis there was a need to use new, or non-traditional, methods of monetary policy regulation. These include the following: measures of quantitative easing; measures of credit weakening; measures of public debt management policy; exchange rate policy measures; bank reserves policy measures, monetary policy measures. It is determined that the European Central Bank is currently examining all possible monetary policy instruments in order to mitigate the impact of the coronavirus on the economy, but nowadays the single monetary policy in the Eurozone, may this also be non-traditional, does not allow to align existing imbalances.

The European Central Bank's (ECB) role as a political actor during the euro crisis raised concerns about its independence and insufficient accountability. Against this backdrop, the article investigates how and why the ECB reacted to demands for more accountability during and following the crisis. To this end, we revisit the independence-accountability nexus, adding three qualifications to the conventional wisdom that independence and accountability do not go together. First, recurring to the governor's dilemma, we argue that a delegation relationship characterized by a high level of independence favours competence over controllability. Second, we open the black box of accountability by investigating the extent to which the ECB made the strategic choice to improve selected accountability dimensions. Third, against the commonsensical view that ECB accountability mechanisms are underdeveloped, this piece shows that certain accountability dimensions have been continuously improved to defend independence. The findings contribute to the literature on accountability and the causes and consequences of delegating power to supranational institutions. [ABSTRACT FROM AUTHOR]

(Series Information) European Papers - A Journal on Law and Integration, 2020 5(1), 671-685 | European Forum Insight of 26 June 2020 | (Table of Contents) I. Introduction. - II. The Pandemic Emergency Purchase Programme (PEPP). - III. A message from Karlsruhe: is the PEPP on the verge of monetary financing? - IV. Conclusions. | (Abstract) After describing the measures adopted by the European Central Bank (ECB) to mitigate the crisis caused by the COVID-19 pandemic in the euro area, the Insight focusses on the repercussions of the controversial judgment adopted by the German Federal Constitutional Court (BVerfG) on 5 May 2020. It is contended that the criteria adopted by the BVerfG to assess the consistency of the Public Sector Purchase Programme with the monetary financing prohibition might lead to a future finding that the PEPP programme indeed circumvents the prohibition. While the BVerfG judgment is putting sand in the wheels of the ECB and is exposing the limits of the current legal framework, it might also prompt a leap forward in the European integration process.

As part of the fight against the negative consequences of the 2008 global financial crisis, the European Central Bank (ECB), in addition to traditional monetary policy instruments for the purpose of economic recovery, began to implement non-standard measures relatively early. At the same time, after the crisis, there is an intensive study of macroprudential policy and the implementation of its instruments. On the other hand, the Croatian National Bank (CNB) used macroprudential instruments even before the crisis, but the first non-standard monetary policy measure was implemented in March 2020. Proven research confirmed that the implementation of monetary policy and the implementation of non-standard measures had a positive impact on economic recovery. An analysis using descriptive statistics at EU level showed that there is a significant negative correlation between monetary aggregates and the unemployment rate. The conducted analysis in Croatia also shows a statistically significant negative correlation between the money supply and the unemployment rate. However, analyzing at the EU and Croatian level M2 the monetary aggregate reduced by the money supply M1 and the unemployment rate, a strong positive correlation is visible, which means that the increase in savings leads to an increase in the unemployment rate. The relations between inflation and debt in GDP with other variables are statistically insignificant both at the EU level and in the Republic of Croatia.