The effectiveness of these will crucially depend on the degree of sophistication of the financial market participants and the interlocutors. The extent of transparency in central bank communication has been dictated by the norms of openness in the body-politic as well. Illustratively, Bank of England (BoE)’s information dissemination is governed by the Freedom of Information Act 2000 of the U.K.
The introduction of an ERF would strengthen national commitment to debt reduction (as the share of national debt transferred to the fund would be backed by a dedicated revenue stream) and reduce the systemic relevance of (residual) national debt. This would be 2  instrumental in enhancing the credibility of the no-bailout clause and the enforceability of European fiscal rules.