The Frankfurt-based European Central Bank has been
described for most of its short existence in pretty derogatory
terms: arrogant, incompetent, out of touch, lacking transparency
and credibility - the list goes on. Throughout this period,
comparisons with the US Federal Reserve have been particularly
unfavourable. This year, while the Federal Reserve has cut rates
often and deep to fight off recession, the ECB has done little. Fed
chairman Alan Greenspan looks like a hero and ECB president Wim
Duisenberg has attracted calls for his resignation. But quick
judgements overlook the very different mandates of the two
institutions.
In a straw poll of economists and investors conducted by Euromoney
in August the ECB comes across as better respected than its popular
reputation might lead one to believe. Supporters say that many of
the accusations have been premature and the ECB has in fact done a
good job in delivering on what it is mainly charged...
