Overview

This book probes one of the world's most powerful monetary institutions, the European Central Bank (ECB) - how it came into being, what determines its policies today and how it might develop in the future. Revealing hitherto non-researched documents and information provided by key decision-makers, it offers fresh, detailed insight into how Europe's bankers and politicians negotiated the ECB's establishment and the statutes by which it is run. It analyses the web of relationships among political authorities, the ECB, the European System of Central Banks (ESCB) and National Central Banks as well as relationships internal to the ECB itself, notably the Governing Council. It devotes particular attention to period 1988-1991, when negotiators hammered out the statutes of the ESCB and ECB, parallel articles of the Treaty of Maastricht, and Europe's Economic and Monetary Union (EMU). It compares these institutional arrangements with those governing central banking in the United States, especially the Federal Reserve System. This study reveals how European monetary policy-making actually takes place, set against the background of the system's federal character, the weights given centralization versus decentralization, and in particular the role of checks and balances - a concept essential to all modern federally organized systems - and how and why they are applied according to the Statute both within the ESCB and vis-a-vis the political authorities. The book also comments on those parts of the proposed European Constitution (which Europe's government leaders endorsed officially in October 2004) relating to the EMU and the role budgetary rules should play in it. The study criticizes the fundamental lack of checks and balances in Europe's now contested Stability and Growth pact. For those interested in Europe's system, or central banking systems in general, this study offers a unique and comprehensive assessment. It will be of interest to professionals wishing to learn in depth about ECB decision-making as well as to academics and students interested in the political, economic and legal aspects of the system.

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9789036192927

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