Central bank bashing: The case of the European Central Bank

Central banks do not operate in a vacuum. In this paper we analyse the factors leading to external pressure or public support for European monetary policy. Moreover, based upon the findings for the Deutsche Bundesbank, some additional lessons are drawn for the ECB. External pressure on the ECB mainly stems from politicians or from international organisations (such as the IMF). In contrast with evidence for the Bundesbank, interest groups (such as commercial banks) hardly try to influence European monetary policy. German data show that factors leading to external pressure on the central bank are rising unemployment and the threat for governments to lose their majority in the next election. This latter source of pressure is, however, likely to be of minor importance for the ECB.European Central Bank; Bundesbank; External Pressure; Public Support