The European Central Bank (ECB) was first introduced in the European legal order on the occasion of the Treaty of Maastricht (1992). An official EU institution which is governed by EU law, the ECB of modern times differs vastly from its inception in 1998, which manifests in three main ways: monetary policy options, consideration of concerns other than low inflation in its policy-making, and its role in the Banking Union.
This edited collection offers a retrospective and prospective account of the ECB, charting its evolution in detail with chapters written by leading academics and practitioners. Part 1 examines the substantive changes to monetary policy introduced by the ECB as a consequence of the financial and sovereign debt crisis by considering their legal basis. Part 2 moves beyond monetary policy by shifting to the new roles that the ECB has been called upon to play, notably in banking supervision and resolution. Parts 3 and 4 deal with transformations to inter- and intra-institutional relations, and take stock of these transformations, reflecting on the nature of the ECB of current times and which direction it could be heading in the future.
The authors analyse the most salient and controversial elements of the ECB's crisis response, including unconventional monetary policy measures and the ECB's risk management strategy. Beyond monetary policy, the book further examines the role played by objectives such as financial stability and environmental sustainability, the ECB's relationship to the Lender of Last Resort function, as well as its new responsibilities in the Banking Union.
Author(s): Thomas Beukers, Diane Fromage, Giorgio Monti
Publisher: Oxford University Press
Year: 2023
Language: English
Pages: 476
City: Oxford
Cover
Half-Title
Title
Copyright
Foreword
Preface
Contents
List of Contributors
List of Abbreviations
1. Introduction: The ‘New’ European Central Bank
I. Why Wonder about a ‘New’ European Central Bank
II. The Contributions to this Edited Volume
III. Taking Stock of the ‘New’ European Central Bank
A. Perspectives on EMU and ECB change
B. The New European Central Bank
C. Causes, triggers, and factors of ECB evolution
IV. Looking Ahead: Future Developments and Challenges
PART I: THE ECB’S RESPONSE TO THE FINANCIAL AND SOVEREIGN DEBT CRISIS: Unconventional Monetary Policy and the Lender of Last Resort Function
2. The Transformation of the ECB in Sovereign Bond Markets
I. Introduction
II. The ECB in the Original Set-up of the Currency Union
A. The stability paradigm
B. The narrow conception of stability
III. The New Stability Conception
A. The Securities Markets Programme
B. Outright Monetary Transactions
IV. Reconciling the New Stability Conception with the Law
A. The mandate
B. The prohibition on monetary financing
V. Judicial Review of the New ECB
VI. Conclusion
3. The ECB’s Unconventional Quantitative Easing is Turning to Conventional Monetary Policy
I. Introduction
II. The ECB as a Consensus Model Central Bank—the First Decade
III. The ECB Turns to QE—the PSPP
A. The main features of the PSPP
B. The stated aims of the PSPP
IV. QE and PSPP in Economic Theory and Central Bank Practice
A. QE in macroeconomics
B. QE as a central banking tool
V. The PEPP Adds to the ECB’s QE Firepower
A. PEPP as the pandemic quantitative easing
B. Analysing the objectives and effects of PEPP
VI. Conclusions: The ECB and New Monetary Policy
4. The ECB’s Collateral Framework from the 1990s until the Pandemic
I. Introduction
II. ECB Risk Management before 2010
III. ECB Risk Management since 2010
IV. The Future of ECB Risk Management
A. Revising the objectives of risk management
B. Market attentiveness instead of market neutrality
C. Developing internal credit rating facilities
D. Addressing legitimacy concerns by coordinating with EU political institutions
V. Conclusion
PART II: MOVING BEYOND MONETARY POLICY: The ECB, Financial Stability, Economic Integration, and the (Future of the) Banking Union
5. The ECB and Financial Stability
I. Introduction
II. Financial Stability—the Conventional Use of an Economic Concept
III. Financial Stability and the Law of the Economic and Monetary Union
IV. Policy Instruments of Financial Stability
V. Preventive Policy Instruments of Financial Stability
A. Prudential regulation
B. Prudential supervision
C. Payment systems
VI. Remedial Policy Instruments of Financial Stability
A. ELA: National Central Banks (NCBs) as Lenders of Last Resort (LOLR) to individual institutions
B. Crisis coordination
VII. Monetary Policy Tools as Secondary Policy Instrument of Financial Stability
A. ECB standard monetary policy
B. The ECB’s unconventional monetary policy measures
C. Unconventional monetary policy and financial stability
D. Monetary policy and the distinction between preventive and remedial instruments
VIII. Conclusions
6. The ECB and Economic Integration
I. Introduction
II. Asymmetry of Competences and Interdependence of Policy Areas
III. Delineation of Competences
IV. Budgetary Stability: Economic Policy Coordination and Financial Assistance
A. Strengthening of the Stability and Growth Pact
B. The European Stability Mechanism and the ECB
V. Financial Stability: New Forms of Supervision for the Internal Market
A. Macroprudential supervision in the European Systemic Risk Board
B. Microprudential supervision in the Single Supervisory Mechanism
VI. The Cunning of European Integration
7. The ECB’s Role in the European Banking Union
I. Introduction
II. The Banking Union’s Context—the ECB’s Mandate
A. Price stability
B. The ECB’s secondary objectives
III. The Banking Union and the Single Supervisory Mechanism
A. The legal basis of ECB supervision
B. ECB competences and tasks as a bank supervisor
C. The Supervisory Board
D. ECB, banking regulation, and sustainability
E. ECB primary task of price stability and new supervisory role
IV. Banking Union and the Single Resolution Mechanism
A. The Single Resolution Mechanism
B. ECB/SSM coordination with the SRB
V. Summing Up and Future Challenges
8. The Relationship between the ECB and the National Competent Authorities in the Single Supervisory Mechanism: Problems and Perspectives
I. Introduction
II. The Role of the ECB and the NCAs within the SSM: An Overview
A. The SSM: rationale and organization
B. The ECB tasks, powers, and responsibilities
C. The NCA tasks, powers, and responsibilities
III. The Role of the ECB and the NCAs in Day-to-Day SSM Banking Supervision of Significant Institutions
A. The JSTs
B. The SEP: off-site and on-site supervision
C. The SREP
IV. The Role of the ECB and the NCAs in SSM Authorizations
A. SSM common procedures (banking licences and qualifying holding authorizations)
B. Fit and proper authorizations
C. Other SSM authorizations for SIs
V. The Role of the ECB in the Oversight of the Functioning of the SSM
A. The ECB’s responsibility for oversight
B. The NCA’s duty of assistance
VI. Conclusion
9. The Role of the ECB in the International Arena and the External Dimension of EMU: A ‘New’ ECB within a Crippled Legal Framework?
I. Introduction
II. The Legal Framework of the ECB’s International Dimension
III. The Tricky International Legal Status of the ECB
IV. The Evolution of the ECB’s International Dimension: The ECB as a Growing Global Player?
A. ‘Article 219 TFEU’ practice
B. Relationship with international organizations and fora
C. The ECB’s international cooperation instruments
D. ‘Borrowing’ of the ECB outside the EU Treaty framework
V. A Critical Appraisal of the ECB’s International Dimension: A ‘New’ ECB within a Crippled Legal Framework?
VI. Conclusion
PART III: INSTITUTIONAL SETTING: The ECB’S ‘Institutional Logic’ and Its Relationship with Governments, Courts, and Parliaments
10. The Independence of the ECB: Justification, Challenges, and Possible Threats
I. Independence in Times of Crisis
II. The Justification of Central Bank Independence
A. Economic background
B. (German) democratic theory
III. Manifestations of Independence
IV. Challenges and Threats
A. Challenges to independence
B. Threats to independent monetary policy
V. Conclusion and Outlook
11. The Legitimacy and Accountability of the ECB at the Age of Twenty
I. Introduction
II. The ECB’s Inception
III. The Evolution of the ECB’s Democratic Legitimacy and Accountability
A. The ECB’s role as crisis manager
B. The ECB’s role in the European Banking Union
C. The ECB and the COVID-19 pandemic
IV. The ECB’s Accountability at Twenty and Beyond
12. The ECB and the Court of Justice: Old Toolbox, New Problems
I. Introduction
II. Is there a Role for the CJEU?
III. Objectives Versus Effects and the Elusive Quest for the Boundaries of Monetary Policy
IV. The Role of Proportionality
V. Judicial Scrutiny and Standard of Review
A. Principles of judicial review
B. Standard of scrutiny
C. Process requirements
VI. Prudential Supervision: A New Litigation Landscape
A. Composite procedures and hybridity
VII. Application of National Law by the ECB
VIII. Fines
IX. Conclusion
13. Assessing and (Re-)situating Today’s ECB in the EU’s Institutional Landscape
I. Introduction
II. The ECB’s Institutional Structures: From Maastricht to Lisbon Today
A. The ECB’s original institutional architecture
B. The adaptation of the ECB’s institutional design to the EBU: increased national influence in the functioning of the ECB?
III. Has the National Component within the Supranational ECB Grown Larger?
A. Enhanced representation of national interests in the ECB’s institutional structure proper
B. The potential reinforcement of the national dimension in practice
C. The Eurosystem’s and the ECB’s supranational character (still) reinforced by recent judicial developments
IV. Re-situating the ECB in the EU’s Institutional Landscape: How Do the Institutional Logics that Govern Today’s ECB Compare to Those of other EU Institutions and Bodies?
V. Conclusion
14. The ECB in the New Normal: Organizing Fiscal Support for Monetary Policy
I. Introduction
II. The Institutional Loneliness of the ECB
III. A Euro Area Fiscal Capacity
IV. A Safe Sovereign Asset for the Euro Area
V. A Fiscal Backstop for the Eurosystem
VI. Conclusion
PART IV: A CONTEXTUAL ANALYSIS OF THE ECB
15. The ECB Mandate—a Comparative Constitutional Perspective
I. Introduction
II. Central Bank Mandates: Formal Sources and their Implementation
A. Legal sources of central bank mandates, objectives, and tasks
B. Implementation of central bank mandates: a purposive and functional approach since the GFC
III. Conclusions
16. The Role of Constitutional Law for the ECB: Past, Present, and Future
I. Introduction
II. A Constitutional Approach to EMU
III. The ECB as a Constitutional Interpreter
IV. The ECB during the Euro Area Crisis
V. The Judicialization of EMU
VI. Conclusion
17. The ECB’s E-ROAD Ahead
I. Introduction
II. Open Up
III. Reform
IV. Develop
V. Address
VI. Europe
VII. Final Words
Index
