ECB must face closer democratic scrutiny: Transparency

AFP, Frankfurt Am Main :
Democratic oversight and accountability must be overhauled at the European Central Bank, which has taken on an increasingly political role since the financial crisis, NGO Transparency International (TI) charged Tuesday.
“The ECB emerged as the decisive actor in the euro crisis, with an extraordinary degree of latitude,” the report argues, but “faces a significant decline in public trust” even as politicians have loaded more responsibility onto it, such as bank supervision.
TI grants that the Frankfurt institution has notched up numerous achievements in the years since the crisis, becoming banks’ lender of last resort, shutting down financial market speculation against member states, and heading off risks of deflation.
But “each of these achievements has its flip side,” the report finds, with the ECB influencing policy in crisis-hit countries like Greece, Spain, Italy and Ireland by making monetary support conditional on economic reforms.
And the bank’s “quantitative easing” programme, under which it buys tens of billions of euros in government and corporate bonds per month in a bid to drive up inflation, is “a monetary policy experiment, the distributive, financial and macroeconomic consequences of which vastly exceed conventional monetary policy,” TI says.