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The European Central Bank - Essay Example
Author : eleanorakuhic
Pages 5 (1255 words)
The European Central Bank (ECB) is one of the banks under the European System of Central Banks (ESCB), along with the national central banks of the European Union (EU) member states which have not yet adopted the euro. It was established in 1998 replacing the European Monetary Institute…
From the moment of its inception, the European Central Bank has been a favorite target of criticisms from economists and political leaders alike. Surprisingly, among its staunch critics are European countries themselves which suffer economically because of the oftentimes rigid and unreasonable policies ECB follows.
This paper will thus examine how the political and economic world perceives the performance of the central bank in this regard. Commentaries from analysts, studies done by independent economic research bodies, and the media will be the three main sources for this research.
"The list of challenges is long and a lot of work lies in front of us." This was the concluding statement of Gertrude Tumpel-Gugerell, member of the ECB Executive Board during a speech on a conference in Vienna, Austria in 2004. However, she was optimistic that the system would be able to handle challenges that would be present along the way. (ECB, 2004)
Among the many challenges present is how to balance decision-making with regards to rate increase to benefit all the economies of the EU member states. Because the ECB does not only cater to a single economy, it has this inherent challenge. ...