Policy-making of the European Central Bank during the crisis: Do personalities matter?

Roland A, Basham J. Policy-making of the European Central Bank during the crisis: Do personalities matter?. IPE Working Paper. Vol 38. Berlin: Berlin School of Economics and Law. Institute for International Political Economy; 2014.The European sovereign debt crisis represents an interesting opportunity to investigate the reaction of the European Central Bank as a crisis fighting institution and the importance of central bank personalities in policy execution. Accordingly, this paper aims at investigating to what extent the policy-making of the ECB during the crisis has been influenced by Trichet’s and Draghi’s different personalities. Based on Friedman’s hypothesis that “accidents of personality” have a great impact on the functioning of a rulebased institution, we find that the clear differences in policy-making between Trichet and Draghi can be explained by specific features of their respective personalities. Institutions matter, but so do personalities