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important isn't babbling to the press or even to courts but monetary policy/ lender of last resort
I beg to disagree. The recent European Court of Justice's Advocate General opinion on OMT defining that secondary market purchases must allow "sufficient time for market price discovery" is an example of how recourse to the courts is extremely important and increasingly constrains monetary policy, as a direct consequence of German pressure.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Mar 16th, 2015 at 05:22:24 AM EST
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Funny when I first mentioned here that the ECb isn't totally with out checks, that there is the ECJ, you didn't wnated to accept that.

You are talking about the power of the ECJ here. Nothing to do with the Bundesbank.

by IM on Mon Mar 16th, 2015 at 10:03:33 AM EST
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when I first mentioned here that the ECb isn't totally with out checks, that there is the ECJ, you didn't wnated to accept that
Do you have a link? I don't remember that.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Mar 16th, 2015 at 10:07:16 AM EST
[ Parent ]
by IM on Mon Mar 16th, 2015 at 01:08:00 PM EST
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Let's just say that 3 and a half years later the principle it has been demosntrated that the court can be used to enforce a restrictive interpretation of the prohibition of monetary financing.

And I say restrictive because the letter of the treaty says nothing about secondary market purchases and yet it is becoming solidified in legal precedent that the prohibition of primary purchases must be extended to secondary purchases unless "sufficient time" elapses for "market price formation".

Hayek has won.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Mon Mar 16th, 2015 at 01:19:36 PM EST
[ Parent ]
As to
There is no substantial judicial review of ECB policy decisions.
observe:
The AG has interesting things to say on market speculation. The GCC, largely relying on the expertise of the Bundesbank, pushed a market fundamentalist line on the matter: whatever risk spreads may be, they reflect nothing but market fundamentals. Hence, the central bank should not mess with them as that would undermine market discipline, distort prices, provoke moral hazard, etc. The AG takes a candidly different view, on numerous occasions referring to market speculation as undermining economies and preventing fundamentals from asserting themselves. In such instances the ECB is justified to step in and correct destabilizing excesses and price distortions. The AG dodges the issue of how to determine "correct" market prices. The ECB should simply use its discretion. The AG goes out of its way to defend the ECB's independence (i.e., unchecked discretion), suggesting that no court should challenge its expertise or question its intentions:
_The ECB must accordingly be afforded a broad discretion for the purpose of framing and implementing the Union's monetary policy. The Courts, when reviewing the ECB's activity, must therefore avoid the risk of supplanting the Bank, by venturing into a highly technical terrain in which it is necessary to have an expertise and experience which, according to the Treaties, devolves solely upon the ECB. Therefore, the intensity of judicial review of the ECB's activity, its mandatory nature aside, must be characterised by a considerable degree of caution (AG 2015, No. 111).
It was of course always something of a curiosity that Germany, the world champion of central bank independence, should see its constitutional court challenge the ECB's independent judgment, and with the Bundesbank, the ECB's blueprint, as its "chief advisor" by its side. So much for the realities of today's intra-European power politics.
(Jörg Bibow, January 14, 2015)

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Mar 16th, 2015 at 01:24:07 PM EST
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Let's jut say that was right about the power of the court.

Unrelated I was also right about the rapidly diminishing Bundesbank influence at the ECB.

by IM on Mon Mar 16th, 2015 at 01:58:38 PM EST
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Yes you were.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Mar 16th, 2015 at 03:26:00 PM EST
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