Explaining European Union Citizens’ Trust in the European Central Bank in Normal and Crisis Times

Abstract

We study the determinants of trust in the European Central Bank (ECB) as measured by the European Commission's Eurobarometer survey, in particular during the global financial crisis and the European sovereign debt crisis. We find that the fall in trust in the ECB in crisis times can be rather well explained based on the pre‐crisis determinants. We also show that the fall in trust reflected the macroeconomic deterioration, a more generalized fall in the trust in European institutions in the wake of the crisis, and the severity of the banking sector's problems, to which the ECB was associated in the public opinion.

The German Public and Its Trust in the ECB: The Role of Knowledge and Information Search

“…(2012), Bursian and Fürth (2012), and Ehrmann et al (2013) all discover a general decline in trust in the ECB over the course of the financial crisis. However, as we will argue later, this conclusion may be premature.…”

“…Farvaque et al (2011) study trust in the ECB and conclude that socio-demographic determinants dominate macroeconomic ones, whereas Bursian and Fürth (2012) emphasise the role of macroeconomic conditions in the trust-building process in addition to individual socio-economic characteristics. Kaltenthaler et al (2010) and Ehrmann et al (2013) add a subjective and noisy measure of factual knowledge of the ECB to individual determinants of trust and find respondents who previously heard about the ECB to be more trusting of it. Finally, Blinder et al Employing novel survey data for Germany, our paper links both individual monetary policy knowledge and information search to the literature that analyses citizens' trust in central banks.…”

Trust in Institutions and Income Inequality in the Eurozone: The Role of the Crisis

“…This leads to the apparently counterintuitive result that country-specific variables affect trust in a supranational institution. Through a micro-founded empirical model and taking into account many factors influencing individual economic situations, Ehrmann et al (2013) prove that the decline in trust in the ECB is due to the combination of the following three effects: i) the deterioration in economic conditions during the crisis; ii) the overall decline in public trust in the European project during the crisis, because citizens saw Europe as being unable to address issues related the global crisis and iii) the fact that the ECB was associated to the troubles of the financial sector. However, they conclude that the evolution of the macroeconomy is sufficient to explain the decline of trust and that there was not sufficient change in the regularities of the coefficient between normal and crisis times.…”

“…Therefore their inclusion would raise issues related to the sample homogeneity. 9 Ehrmann et al (2013) used a similar technique to explain the trust in ECB in normal and crisis times as being dependent on a set of micro and macroeconomic variables. They conclude that the evolution of the macroeconomy is sufficient to explain the decline of trust and that there was no sufficient change in the regularities of the coefficient between normal times and those of crisis.…”

The Influence of Media Use on Laymen's Monetary Policy Knowledge in Germany

“…See van Sickle (1992) for a detailed distinction between different types of knowledge. 1999) and the ECB (Ehrmann et al 2013, Hayo and Neuenkirch 2014, van der Cruijsen and Eijffinger 2010.…”