OBJECTIVE: Despite growing feelings of euro-scepticism and euro-pessimism among many member countries, the European Central Bank (ECB) was the glue that bound the UE together during and after the economic crisis. After 2008 the ECB introduced non-standard monetary policy measures, along with long-term credits for commercial banks and its quantitative easing bond-buying program. These asset purchases supported economic recovery and growth across the euro area and helped the Eurozone return to inflation levels below, but close to, 2%. We hold that the ECB has fulfilled its role of lender of last resort and has carried forward the most revolutionary program since the monetary union: the Banking Union. Thanks to the Single Supervisory Mechanism (SSM) and the Single Resolution Mechanism (to ensure the efficient resolution of failing banks with minimal costs to taxpayers) the EU banking system is currently more transparent and stable than ever before.

DATA/METHODS: The paper demonstrates this idea using macro and micro economic data. Our main data source was ECB statistics and Orbis data base. In particular for the non-standard monetary measures we analyze macro-economic data demonstrating the increased economic convergence and stability of the banking sector. On the other side, for the SSM we analyze balance sheet data concerning the performance of relevant banks in Europe in comparison to those of non-relevant banks, taking into account the improved general conditions of the European economy in recent years. We mainly used ordinary least squares (OLS) methodology to analyze the data.

EXPECTED RESULTS: A quantitative and qualitative explanation of the relevance of the ECB in the European Monetary Union.