Parliamentary Scrutiny of Euro Area National Central Banks: Blind Trust or Strategic Scrutiny?

Following the loss of monetary policy in 1999, euro area NCBs continued to manage a range of other policies including, in many member states, bank supervision. Since 2008, the outbreak of the international financial crisis, the euro area sovereign debt crisis and the accompanying economic stagnation in many euro area member states have combined to increase the political salience of the policies adopted and implemented by both the European Central Bank and euro area NCBs. Yet, the intensity of parliamentary scrutiny varies strongly across member states.

In this context, our paper analyses the formal scrutiny powers of national parliaments over euro area NCBs, examining four cases in depth, in order to understand the varying level of parliamentary scrutiny. On the basis of a new matrix developed to measure the parliamentary accountability of central banks, we find that the level of accountability corresponds neither to actual NCB powers nor to the level of parliamentary control powers over the political executive. To explain this surprising finding, this paper examines a number of other factors, including: pre-EMU NCB independence, public trust in central banks and public support for EMU. This analysis is conducted on the basis of research into national laws on NCB independence, formal rules on parliamentary scrutiny of NCBs, and informal forms of scrutiny; combined with interviews with both national parliamentarians and NCB officials.