THE EUROPEAN CENTRAL BANK AND THE FEDERAL RESERVE: A COMPARATIVE ANALYSIS

Abstract

The purpose of this article is to identify the main differences and similarities between the European Central Bank (ECB) and US Federal Reserve (FED) in terms of their functional framework and monetary policy. The research is based on a comparative analysis of the history of establishing the Eurosystem and the Federal Reserve System, which has influenced the way these central banks operate today. It also analyzes the policy responses of the two institutions to the 2007 global financial crisis, since both their non-conventional policy measures and the effects thereof on growth, inflation and unemployment rates were slightly different. The paper finds that there are differences between the ECB and FED rather regarding the organization and functioning of the Committees for monetary policy and monetary policy objectives than the institutional structure and policy framework

Keywords

• Eurosystem
• European Central Bank
• US Federal Reserve System
• monetary policy
• nonconventional measures