by Andres Tupits (Senior Associate at Sorainen)
My recent PhD thesis at the University of London analyses legal issues related to the participation in the Eurosystem by a national central bank (NCB). My aim is to develop principles that could be used for a national central bank law for a European Union Member State that has adopted the euro.
The transfer of monetary policy to the supranational level has substantially changed the European central banking framework and confronted the NCBs with their new role as members of the Eurosystem.
This membership has affected the governance structures of NCBs, with the emphasis on Governors and their independence. Most of the changes relate to the fulfilment of tasks of the Eurosystem and the level of independence needed by the NCBs to carry out these tasks. I have found that although there are differences amongst the Member States, the understanding of central bank independence is fairly similar throughout the EU.
The accountability of the NCBs is driven not by the EU but by national rules, which is why the extent of reporting commitments varies between the Member States. The same is true of transparency, with some NCBs tending to be more open towards the general public than the others. However, it remains debatable whether there should be a harmonisation of rules on transparency and accountability at the EU level and whether the establishment of such harmonised rules would set higher standards than the current average.
A debate on whether the prudential supervision of credit institutions should be a European rather than a national matter has been going on for a number of years, and I would like to add to the discussion as far as the financial stability and ESCB-related tasks are concerned.
Finally, on the basis of the Estonian NCB Statute, I suggest amendments reflecting best practices for central bank tasks, independence and accountability.