Trust Me! I Am a European Central Banker

SAFE Working Paper No. 31

40 Pages Posted: 5 Sep 2013

See all articles by Dirk Bursian

Dirk Bursian

Goethe University Frankfurt; Deutsche Bundesbank

Sven Furth

Goethe University Frankfurt - Chair of Banking and Finance; Goethe University Frankfurt - Faculty of Economics and Business Administration

Date Written: June 1, 2012

Abstract

In the aftermath of the financial crisis, the ECB has experienced an unprecedented deterioration in the level of trust. This raises the question as to what factors determine trust in central banking. We use a unique cross-country dataset which includes a rich set of socio-economic characteristics and supplement it with variables meant to reflect a country’s macroeconomic condition. We find that besides individual socio-economic characteristics, macroeconomic conditions play a crucial role in the trust-building process. Our results suggest that agents are boundedly rational in the trust-building process and that current ECB market operations may even be beneficial for trust in the ECB in the long-run.

Keywords: Central Banking, European Central Bank, Financial Crisis, Fiscal Crisis, Trust

JEL Classification: D1, E5, G21, H6

Suggested Citation

Bursian, Dirk and Furth, Sven, Trust Me! I Am a European Central Banker (June 1, 2012). SAFE Working Paper No. 31. Available at SSRN: https://ssrn.com/abstract=2320447 or http://dx.doi.org/10.2139/ssrn.2320447

Dirk Bursian (Contact Author)

Goethe University Frankfurt ( email )

Grüneburgplatz 1
Frankfurt/Main, 60323
Germany

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

Sven Furth

Goethe University Frankfurt - Chair of Banking and Finance ( email )

Grüneburgplatz 1
P.O. Box 11932
Frankfurt (Main), 60323
Germany

Goethe University Frankfurt - Faculty of Economics and Business Administration ( email )

Grueneburgplatz 1
Frankfurt am Main, D-60323
Germany

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