Central Bank's Involvement in Safeguarding Financial Stability in the European Union

Abstract

This is a summary of PhD thesis (title above) in Warsaw School of Economics 2013. Detailed research results are published as a CFS Policy Paper in my profile. The main thesis states that central bank's involvement in contributing to financial stability is determined by many factors, two of which are most important: legal basis and measures taken by the central bank. Research hypothesis: The central banks of 27 EU countries are characterized by strong differences in their degree of involvement in safeguarding financial stability, because central banks in the euro zone are more involved in safeguarding financial stability than non-EMU central banks in the EU. Using a novel methodology developed by the author, a “financial stability engagement index” is constructed to test the research hypothesis, while the main thesis is tested by means of literature review and case studies of central banks’ actions.