scholarly journals Az Európai Központi Bank szerepének átalakulása az európai válságkezelés során = The Changing Role of the European Central Bank during the European Crisis in 2008

2021 ◽  
Vol 16 (1) ◽  
pp. 69-86
Author(s):  
Marcell Zoltán Végh ◽  
Anita Pelle
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
European Central Bank ◽  
Balance Sheet ◽  
Banking Union ◽  
New Era ◽  
European Central ◽  
European Crisis ◽  
Changing Role

Az elhúzódó európai válság során az Európai Központi Bank (EKB) szerepe is átalakult. Egyrészt válság idején, inflációs nyomás helyett deflációs veszéllyel szembesülve, a stabilitás biztosítása mást implikál, mint szokványos időkben. Másrészt tartósan nulla százalék körüli kamat mellett az eszköztárnak kevésbé bevált további elemeit kell bevetni. Az EKB esetében 2010. májusban indult új korszak az első eszközvásárlási programmal, amelyet több hasonló követett. A jegybank mérlege néhány év alatt több mint kétszeresére duzzadt, a legdinamikusabban bővülő tétel eszközoldalon az euróövezetbeli értékpapírok kategóriája lett. Mindeközben az EKB-nak a kiépülő bankunióban is központi szerep jutott. A bankfelügyelet élesítésére 2017 nyarán került sor, az eszközvásárlási programot pedig 2018 végéig vezették ki. Az EKB tehát új és jelentős feladatokat vállalt az európai válságkezelésben, alapvetően sikerrel. In the course of the prolonged European crisis, the role of the European Central Bank (ECB) has also changed. Firstly, in times of crisis, facing risks of deflation instead of inflationary pressure, ensuring stability implies other methods than in usual times. Secondly, with long-lastingly around-zero per cent interest rates, further, less used monetary policy tools are needed. In case of the ECB a new era started in May 2010, with the first asset purchase programme, which was then followed by several similar ones. The central bank’s balance sheet more than doubled in a few years’ time; the most dynamically growing item on the asset side was the category of Eurozone securities. In the meanwhile the ECB was assigned a central role in the newly developed banking union as well. Supervision was put in place in summer 2017 and the asset purchase programme was phased out by the end of 2018. Overall, the ECB undertook new and significant roles in European crisis management – fundamentally with success.

A NEW ERA FOR MONETARY POLICY: CHALLENGES FOR THE EUROPEAN CENTRAL BANK

2017 ◽  
Vol 62 (01) ◽  
pp. 57-86 ◽  
Author(s):  
AD VAN RIET
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Interest Rates ◽  
European Central Bank ◽  
Global Financial Crisis ◽  
Balance Sheet ◽  
Price Stability ◽  
Lender Of Last Resort ◽  
New Era ◽  
European Central

Since the start of the global financial crisis, the European Central Bank (ECB) has faced exceptional challenges in fulfilling its price stability mandate, marking the start of a new era of monetary policy-making for the eurozone. This paper reviews the ECB’s evolving response from mid-2007 to early-2015, showing how it combined the standard tool of adjusting its policy interest rates with non-standard passive and active balance-sheet measures, accompanied by a forward guidance of its intended monetary stance. Altogether, the ECB stayed focused on price stability while fulfilling the two classical roles of lender of last resort to resolve money market tensions and market maker of last resort to repair monetary transmission. Addressing the many challenges was complicated by the nexus between fragile banks and vulnerable governments, the ensuing financial fragmentation and the complex institutional and political structure of the eurozone. Looking ahead, the new reinforced European financial architecture could make the ECB’s monetary policy task of maintaining price stability for the eurozone easier to accomplish.

scholarly journals European Banking Union – an institutional analysis

2020 ◽  
Vol 5 (1) ◽  
pp. 59-75
Author(s):  
Barbara Majewska-Jurczyk
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
European Central Bank ◽  
Deposit Insurance ◽  
Banking System ◽  
Banking Union ◽  
Insurance Scheme ◽  
European Central ◽  
European Banking ◽  
The Creation

Aim: The Banking Union is an important step towards a genuine Economic and Monetary Union. The strengthening of the European banking system has become a topic of debate since the 2008 crisis when it became clear that stability and security of the system security may require increased supervision over operations conducted. The Banking Union was created to avoid the situation that taxpayers are first in line to pay for bailing out ailing banks. The Banking Union consists of three pillars: 1) the Single Supervisory Mechanism (SSM), which centralizes supervision of European banks around the European Central Bank, 2) the Single Resolution Mechanism (SRM), which the main purpose is to ensure the efficient resolution for recapitalization failing banks, and 3) the European Deposit Insurance Scheme (EDIS), which is still unfinished. The creation of the Banking Union is accompanied by a remarkable transfer of sovereignty to the European level. This article aims to provide an overview of the changes unfolding across the Banking Union from a law and economics perspective and to explain the role of the European Central Bank in supervision over the banking system, which is different from the policy of controlling prices through determining the level of interest rates and keeping inflation under control.   Design/Research methods: The analysis of the functioning Banking Union is based on the review of literature and analysis of reports and legal acts.   Findings: The Banking Union supports financial integration in the EU by implementing a common set of rules and a common supervisory and resolution mechanism. The creation of the Deposit Insurance Scheme is likely to contribute to the protection of banks and consumers in case of a potential future crisis. The author argues that the European Central Bank as a supervisor of the financial market should create a second supervisory body, which would significantly strengthen the system and allow the ECB more efficiently fulfill its task as chief supervisor.

scholarly journals The Federal Reserve’s Dollar Swap Lines and the European Central Bank during the global financial crisis of 2007–09

2020 ◽  
Vol 44 (4) ◽  
pp. 723-747 ◽  
Author(s):  
Emmanuel Carré ◽  
Laurent Le Maux
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Federal Reserve ◽  
European Central Bank ◽  
Global Financial Crisis ◽  
Lender Of Last Resort ◽  
European Central ◽  
The Interest Rate ◽  
The Global Financial Crisis

Abstract Although the literature has studied the role of the Federal Reserve as the global lender of last resort in 2007–09, many aspects of the Dollar Swap Lines to the European Central Bank need further exploration. Accordingly, we provide original evidence about the auction operations, allotted amounts and interest rates with regard to the Federal Reserve’s dollar swaps and the European Central Bank’s dollar provision. More specifically, we examine the demand side of the Dollar Swap Lines (whereas the existing literature mentions the supply side only) and we scrutinise the interest rate (whereas the literature concentrates on volumes) set by the Federal Reserve, and also the rate set by the European Central Bank. Our findings cast light on the nature of the relationship between the Federal Reserve and the European Central Bank. Finally, we contribute to the literature on the global lender of last resort by coining the notion of the financial dilemma, under the dollar system within a framework of globalised financial markets.

scholarly journals Determinanty normalizacji polityki monetarnej Europejskiego Banku Centralnego

2017 ◽  
pp. 175-188
Author(s):  
Irena Pyka ◽  
Aleksandra Nocoń
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Interest Rates ◽  
Euro Area ◽  
European Central Bank ◽  
Balance Sheet ◽  
Open Market ◽  
Effect Analysis ◽  
European Central ◽  
Exit Strategies

Due to the implementation of non-standard monetary policy by the European Central Bank, concentrated in the first part of the financial crisis mainly on the unconventional open market operations, and in the second on the Quantitative Easing policy, the exit strategies and monetary policy normalization have become the subject of intensified discussion. The concept of a return to "normal" monetary policy of the ECB will require the implementation of two aspects: raising of interest rates and reduction of the size of central bank balance sheet. However, it is undisputed that the exit strategies of the ECB could be implemented only after completing of the asset purchase program and stabilization of euro area public finances. It seems that at this moment the monetary policy of Eurozone will have to wait. The main aim of the study is to identify the determinants of the monetary policy normalization of the European Central Bank. Particular attention will be paid to the conditions of normalization relating to the support for creation of economic recovery in the euro area, the increase of inflation towards the inflation target, stimulation of dynamics of lending activity and the situation on the financial market. The following research methods will be used: the literature studies, including domestic and foreign literature, case studies, cause and effect analysis, observation analysis as well as synthesis analysis. 

scholarly journals Causes of The Outbreak of the Eurozone Crises: The Role of the Usa and the European Central Bank Monetary Policy

e-Finanse ◽  
2015 ◽  
Vol 11 (2) ◽  
pp. 47-63
Author(s):  
Natalia Białek
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Interest Rates ◽  
European Central Bank ◽  
Institutional Design ◽  
Global Financial Crisis ◽  
European Central ◽  
Low Interest Rates ◽  
The Usa ◽  
The U.S

Abstract This paper argues that the loose monetary policy of two of the world’s most important financial institutions-the U.S. Federal Reserve Board and the European Central Bank-were ultimately responsible for the outburst of global financial crisis of 2008-09. Unusually low interest rates in 2001- 05 compelled investors to engage in high risk endeavors. It also encouraged some governments to finance excessive domestic consumption with foreign loans. Emerging financial bubbles burst first in mortgage markets in the U.S. and subsequently spread to other countries. The paper also reviews other causes of the crisis as discussed in literature. Some of them relate directly to weaknesses inherent in the institutional design of the European Monetary Union (EMU) while others are unique to members of the EMU. It is rather striking that recommended remedies tend not to take into account the policies of the European Central Bank.

scholarly journals The European Central Bank Quantitative Policy and Its Consistency with the Demand for Liquidity

2015 ◽  
Vol 62 (3) ◽  
pp. 425-451 ◽  
Author(s):  
Sviatlana Hlebik ◽  
Giovanni Verga
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Sovereign Debt ◽  
European Central Bank ◽  
Banking System ◽  
Market Conditions ◽  
Policy Strategy ◽  
European Central

Abstract In 2008 the European Central Bank added a new quantitative policy strategy to its traditional control of the interest rates. This new policy, sometimes called “enhanced credit support”, consists of fully satisfying the demand for liquidity of banks, with the European Central Bank deciding only the timing and characteristics of its interventions. This study analyses the market conditions in which these measures have been taken and their consistency with the demand for liquidity by the banking system. Measures in favour of the sovereign debt of PIIGS countries are also considered.

Titles II and III: Preparation and Early Intervention

2017 ◽  
Author(s):  
Gabriel Moss QC ◽  
Bob Wessels ◽  
Matthias Haentjens
Keyword(s):  
Early Intervention ◽  
Central Bank ◽  
European Central Bank ◽  
Banking Union ◽  
Financial Situation ◽  
Single Supervisory Mechanism ◽  
European Central ◽  
Early Action ◽  
The Individual

As the European Commission has succinctly explained, ‘institutions will be required to draw up recovery plans setting out arrangements and measures to enable it to take early action to restore its long term viability in the event of a material deterioration of its financial situation. Groups will be required to develop plans at both group level and for the individual institutions within the group. Supervisors will assess and approve recovery plans’. Thus, institutions must draw up ‘recovery plans’ which are to be approved by the relevant supervisory authorities, so as to have a plan in place that might be useful to help turn around a material deterioration of the financial situation that institution may face. The ‘relevant supervisors’ are the European Central Bank (ECB) under the Single Supervisory Mechanism (SSM) for systemically important institutions, and the national supervisory authorities for less systemically important institutions, as well as for institutions outside of the Banking Union.

scholarly journals Guaranteeing the ECB’s democratic accountability in the post-Banking Union era: An ever more difficult task?

2019 ◽  
Vol 26 (1) ◽  
pp. 48-62
Author(s):  
Diane Fromage
Keyword(s):  
European Union ◽  
Central Bank ◽  
European Central Bank ◽  
Banking Union ◽  
Democratic Accountability ◽  
Unconventional Monetary Policy ◽  
The European Union ◽  
Banking Supervision ◽  
National Parliaments ◽  
European Central

Following the Great Financial Crisis, the European Central Bank’s functions have been significantly altered. It is now involved in the functioning of a variety of European Union bodies and agencies, new powers in the field of banking supervision have been attributed to it and it has resorted to unconventional monetary policy. Such a concentration of powers arguably gives rise to issues of accountability and institutional balance within the European Union: (i) the resulting institutional framework is particularly complex and difficult to understand; (ii) the numerous functions the European Central Bank assumes makes it increasingly difficult to identify in which arena(s) it should be held to account for which action; and (iii) its role in the different bodies or agencies may vary in theory and in practice, which, in turn, influences the degree to which the European Central Bank should be held to account. This article aims at showing to what extent the European Central Bank’s role has multiplied and diversified with a view to assess how it is held to account in those different instances, and what the consequences are for the European Central Bank’s democratic accountability, primarily towards the European Parliament, as well as towards the Council of the European Union and national parliaments where applicable.

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