The ECB has risked its credibility in a good cause

摘要

No central bank ever lost its credibility by refusing to take expansionary action, no matter how much it was needed by the economy for which it was responsible. Yet credibility is a good thing: it enables any agent to act with a greater expectation of achieving the desired result. So for about half the time central banks are confronted by a trade-off between maintaining credibility and doing what is in the short-term interest of their countries. The actions of the European Central Bank should be judged in that context. Yes, its actions have probably eroded its credibility: the mere fact that we are posed this question is proof of that. But it did so in a situation where a failure to act would have guaranteed a severe, possibly fatal, attack on the eurosystem. It risked its credibility in a good cause. To have remained a sound institution in a collapsing system might be counted a badge of honor by some, but it would not have commended itself to sensible people.