Rules, Discretion and Market Stabilisation in the Euro Area
Since its creation, the euro area has combined a centralised monetary policy with national fiscal frameworks and, initially, national banking supervision. In their report for the
Think Tank of the European Parliament, Zsolt Darvas and Francesco Papadia assess the European Central Bank’s country-specific market-stabilisation instruments with a focus on the balance between rules and discretion in their design and use. They examine the clarity of access criteria, the impact of ambiguity in shaping market expectations, and the extent to which deployment of these tools has succeeded in reducing sovereign stress and safeguarding monetary policy transmission.
https://www.europarl.europa.eu
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