International conference on the accountability of the European Central Bank

Since its creation, the European Central Bank (ECB) has made a significant contribution to price stability and, more broadly speaking, to financial stability. Its accountability and its awkward fit with its independence have been a topic of perennial interest in EU studies. Scholars have castigated various aspects of the accountability and transparency framework that is applicable to the ECB’s activities, as well as of the related practice. In the Maastricht framework, the ECB was entrusted with a narrow mandate, which was underpinned by a strong independence. Over the years, however, it has taken on or was attributed new tasks in response to fresh challenges, and its mandate has been interpreted in novel ways. One need only mention, by way of example, the ECB’s use of so-called unconventional monetary policy instruments, its new competence in the field of banking supervision within the framework of the Banking Union, as well as its involvement in financial assistance programmes. Indeed, more than twenty years on, it might make sense perhaps to speak of a “new” European Central Bank, given how much the institution has changed over the years.

An international conference was held on 28-29 November 2022 at Erasmus University Rotterdam, in order to examine the accountability of the ECB across the range of tasks that it nowadays carries out. How does the need to respond to new challenges and risks (e.g. those posed by, inter alia, climate change, the digital transition, critical market infrastructures, and the COVID-19 pandemic), and the concomitant increase in the powers of the ECB – and, to the extent they are involved in these fields, of the European Supervisory Authorities –, affect their independence and accountability? What is the appropriate level, type and degree of accountability and independence for their diverse tasks? More specifically, has the ECB’s accountability and transparency framework sufficiently evolved to match its expanded powers?

The conference brought together academics as well as EU and national officials to discuss the accountability of the ECB across its main domains of action, including its interinstitutional relationships with old and new actors in the field of Economic and Monetary Union. 30 years since the Maastricht Treaty, which laid down the legal and institutional framework for the Economic and Monetary Union, and 20 years since the introduction of euro coins and banknotes, the time was, in our view, particularly ripe for this type of inquiry. The ECB’s recent monetary strategy review, together with its climate action plan, provided further fertile ground for a novel and all-encompassing reflection. The same is true for the recent plans for a digital euro (currently in its investigation phase), as well as the changes made to EU financial law more broadly, including, but not limited, to the mandate of the European authorities entrusted with the micro- and macro-prudential supervision of the financial system in the Union, with which the ECB regularly interacts and in whose functioning it is actively involved.

The key emphasis in this conference was on a range of topics that are pertinent to the increase (or change) in the ECB’s activity and –where appropriate– in the activity of other EU institutions, bodies or agencies, such as the European Systemic Risk Board and the European Supervisory Authorities. Accordingly, the focus was on:

• climate change and the role of central banks and financial supervisors (with emphasis on monetary policy and banking supervision);
• digitalisation in the Economic and Monetary Union, thereby focusing on the ECB’s plans for a digital euro, as well as the regulation of crypto-assets and their potential effects for monetary policy;
• current monetary policy instruments, with particular emphasis on the outcome of the monetary strategy review and the ECB’s recent measures in response to the pandemic and beyond (such as the Transmission Protection Instrument or the steps taken by the ECB to decarbonise its corporate bond holdings);
• the ECB and national authorities in macroprudential supervision and financial stability more generally.

The participants were invited to analyse the role of the ECB –and, where appropriate, of other institutions, bodies and agencies and/or their interrelationship with the ECB– with respect to the topics adumbrated above. They were further asked to consider the implications of the developments they addressed in their contribution for the ECB’s accountability, as the case may be. Each of these topics touches upon different dimensions of the ECB’s accountability and legitimacy. For example, whilst the greening of monetary policy could enhance the ECB’s legitimacy, it would broaden the areas of activities for which its accountability and transparency must be ensured, also to make sure that the ECB goes far enough in meeting its objectives. Arguably, it would make guaranteeing its accountability even more difficult since its objective would become broader and perhaps less clearly defined. To draw on another example: in the case of the digital euro, (directly or indirectly) democratically legitimised institutions must be involved in its design, where appropriate. The division between the ECB’s and those political actors’ responsibilities needs to be clearly defined if adequate accountability standards are to be held. Accordingly, the conference participants were invited to make proposals for enhancing the existing legal and institutional framework in the fields under consideration, as well as –where appropriate– the ECB’s transparency, accountability and democratic legitimacy. Some of these reforms could be implemented without changing the EU Treaties, whereas others could require a Treaty revision. A special issue will follow, where our participants will further explore these issues.