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This article lists the main functions and tasks of the Eurosystem NCBs in general and of the Bundesbank in particular. The bulk of these activities is related to monetary policy, payment systems and financial stability. Furthermore, this article addresses the question whether the degree of decentralisation prevailing in the Eurosystem is appropriate. General evaluation criteria such as monetary policy efficiency, the ability to act, transparency and cost efficiency do not give a clear-cut answer because they point in opposite directions and a definite weighting mechanism is not available. Looking therefore more closely at the historical development of the German Central Bank System and the U.S. Federal Reserve System, a tendency can be observed over time towards strengthening of the central office. Nevertheless, the main motive for these developments, namely improving the ability to act, does not seem to be of such importance in the European case: fears of possible inertia in the monetary-policy decision process seem to be unfounded because the respective decision-making bodies have always been able to take decisions quickly. |
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