Is the grass really greener on the other side? Parliamentary oversight of the European Central Bank and the Fed*

Abstract

This article explores differences in the parliamentary oversight of the European Central Bank (ECB) and the Federal Reserve (the Fed) in the United States during crisis situations. It is often argued that the Monetary Dialogues with the ECB lack the high level of accountability found in congressional hearings with the Fed. To test this assertion, the study conducts a systematic comparison of parliamentary questions addressed to the two central banks in regular hearings. The analysis focuses on the monetary policy response to Covid-19 from March 2020 to March 2022, when both the ECB and the Fed faced similar challenges and adopted comparable measures. Drawing on a refined analytical framework measuring accountability in parliamentary oversight, the goal is to assess how members of parliaments contest central bank decisions during crisis situations, and in turn, how central banks respond to that contestation. Using qualitative content analysis, the article investigates 1,014 individual questions and their respective answers identified during regular committee hearings. The findings challenge the assumed superiority of Fed oversight compared to that of the ECB: while the Monetary Dialogues may lack the intensity of congressional hearings, the ECB is held to a higher standard of accountability than the Fed.