ECB Monetary Policy Faces Credibility Crisis Amid Difficult Tradeoffs
The article discusses how central banks like the ECB build credibility by making trustworthy promises about their future actions. It emphasizes that being independent is not enough; the bank's policies must also be seen as reliable over time. The ECB faces challenges in balancing short-term benefits with long-term costs, which can affect its credibility. This balance is closely watched by politicians and markets.