Sailing in time of crisis: The European Central Bank's journey towards the European Systemic Risk Board

This paper explains how the European Central Bank gained new responsibilities in the European Monetary Union, through the creation of the European Systemic Risk Board. Special attention has been paid 1) to the economic and political features of a systemic crisis, 2) to the institutional position of the ECB in between financial markets and EU political decision-making arenas, and 3) to the role of ideas and actors strategies. This paper bridges thus the International Political Economy and Historical Institutionalism approaches by taking into account all these variables and how they interact. In a nutshell, the dependant variable of the paper is the weight of the ECB in EU macro-prudential framework, the independent variable is the Bank’s position in between financial markets and the political world, the intervening variable is the financial crisis and the mechanism working on the variables is the strategic selection of ideas. Two hypotheses are developed in this paper to explore these variables. Since financial crisis are unique events, agents are unsure of their interests and institutional reconfiguration is more likely. The ECB was thus a political entrepreneur, framing first the debate, and then proposing institutional solutions to address the identified problems. The Bank was able to diffuse its ideas thanks to its strategic positioning in between financial markets and policy-making and to its tactics of activation/deactivation of the ordo-liberal paradigm. The main findings of this qualitative research are that 1) systemic financial crisis offer more political space to actor‘s strategic expansion of competences (IPE approaches), 2) the ECB benefited from its past legacy of credible inflation-fighter (HI approaches) and was able to emancipate itself from this ideal past and 3) politically exploit its credibility and expertise towards financial markets to make its ideas matter. Finally, the paper is trying to foresee what could be the ―spill-over‖ effect of the ESRB, by looking at the possible future ECB‘s extension of competences over Commission‘s macro-imbalances program, EU banking supervision and data collection and diffusion