And the contours of that mandate were not set by the central bank itself, but by legislators, who themselves were democratically elected. This model has worked because, by sticking closely to its mandate, the Bundesbank has gained the trust of the people. It has cultivated this trust by actively communicating the rationale for its mandate and its plans to achieve it.
This inspired the ECB’s founding fathers to give the ECB an equally clear and narrow mandate oriented towards price stability. And we have established trust by clearly communicating that mandate and, of course, delivering it. This task is more complex for the ECB, however, than it was for the Bundesbank in the past or the Fed today.