The ECB after the crisis: existing synergies among monetary policy, macroprudential policies and banking supervision

Nuno Cassola, Christoffer Kok and Francesco Mongelli

No 424, Working Papers from University of Milano-Bicocca, Department of Economics

Abstract: The prolonged crisis exposed the vulnerability of a monetary union without a banking union. The Single Supervisory Mechanism (SSM), which started operating in November 2014, is an essential step towards restoring banks to health and rebuilding trust in the banking system. The ECB is today responsible for setting a single monetary policy applicable throughout the euro area and for supervising all euro area banks in order to ensure their safety and soundness, some directly and some indirectly. Its role in the area of financial stability has also expanded through the conferral of macroprudential tasks and tools that include tightening national measures when necessary. It thus carries out these complementary functions, while its primary objective of pursuing price stability remains unchanged. What are the working arrangements of this enlarged ECB, and what are the similarities and existing synergies among these functions? In the following pages, focusing on the organisational implications of the “new†ECB, we show the relative degrees of centralisation and decentralisation that exist in discharging these functions, the cycles of policy preparation and the rules governing interaction between them.

Keywords: European Central Bank; monetary policy; banking union; banking supervision; financial stability; systemic risks; macroprudential policies; decision-making process (search for similar items in EconPapers)
JEL-codes: E42 E58 F36 G21 (search for similar items in EconPapers)
Pages: 57
Date: 2019-12, Revised 2019-12
New Economics Papers: this item is included in nep-ban, nep-eec, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: The ECB after the crisis: existing synergies among monetary policy, macroprudential policies and banking supervision (2019)
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