The European Central Bank: powers, policies and problems

Outlines the formation, structure and powers of the European Central Bank, which has the objective of maintaining price stability. Discusses its implementation of monetary policy and considers both actual and potential problems in terms of its independence, leadership, interest rate management, co‐ordination with national fiscal authorities, transparency of operations and cross‐border settlement systems. Criticizes its limited powers for prudential supervision of banks in the EMU and suggests that it needs wider objectives, more authority and greater independence from national influences.