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The European Central Bank
- Why is it that the Bundesbank became the role model for the ECB?
- There is a difference between ‘instrument conservatism’ and ‘target conservatism’ in central banking. Can you explain the difference?
- Why is it that the ECB has been more cautious than the Federal Reserve in using its interest rate instrument?
- The Central Bank Governors in the Governing Council each have one vote, despite large differences in country size. Why did the drafters of the statutes of the ECB not choose a qualified voting system, as is the case for the Council of Ministers.
- How can the Taylor rule be used to measure the degree of convergence (or divergence) in the interest rates that are desired by the Governors of the national central banks?
- Will the new regulatory and supervisory structure in the European Union be strong enough to prevent future financial crises?
- The banking union consists of a single supervisory authority (the ECB) and an embryonic resolution mechanism. Is the latter likely to be sufficient to deal with a systemic banking crisis in the Eurozone?
- What is the Bagehot doctrine? Is it relevant for the role of the ECB as a lender of last resort?
- Explain why we concluded that the banking union is incomplete?
- Do you think that the present banking union in the Eurozone could withstand a new banking crisis?
- How would you sequence the further completion of the banking union?