This time it is for real – the ECB's accountability amidst rampant inflation

Abstract

The accountability of the European Central Bank (ECB) is a complicated issue, as it is constitutionally located at a particular intersection of constitutional and international law and as a central bank it has features of both regulatory administration and also of the conduct of economic policy. It is suggested that a key element is that the ECB's responsibility to maintain price stability could be seen as a form of accountability mechanism through which it is ultimately accountable to the people for delivering to them on the promise that money can be trusted as a means of payment and a store of value. The article discusses how the new roles and strategy of the ECB as well as its enormous balance sheet could affect its ability to maintain credibility as a constitutional inflation-fighting central bank. The critical context is the first inflation shock that the ECB is facing since its establishment, where the actions and communication of the ECB will form the means to maintain the trust of the public.