The adoption of the euro in 1999 by 11 member states of the European                  Union created a single currency area second in economic size only to the United                  States. The euro zone's monetary policy is now set by the European Central Bank                  (ECB) and its Governing Council rather than by individual national central banks.                  This CESifo volume examines issues that have arisen in the first years of ECB                  monetary policy and analyzes the effect that current ECB policy strategy and                  structures may have in the future.After a detailed description and assessment of ECB                  monetary policy making that focuses on such issues as price stability and the                  predictability of policy decisions, the book turns to two important issues faced by                  European central bankers: the transparency and credibility of decision making and                  the ECB's decentralized structure. After showing that transparency in decision                  making enhances credibility, the book discusses the ECB's efforts at openness, its                  political independence as guaranteed by law, and its ultimate accountability. The                  book then considers the effects of the decentralized ECB structure, focusing on                  business cycle synchronization, inflation differentials, and differences in monetary                  policy transmission in light of the enlargement of the monetary union. The book also                  discusses options for ECB institutional reforms, including centralization, vote                  weighting, and cross-border regional banks.

The European Central Bank: Credibility, Transparency, and Centralization PDF

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