Crisis of Confidence: The 2008 Global Financial Crisis and Public Trust in the European Central Bank

ABSTRACT: The global financial crisis of 2008 shocked the world, and its effects continue to be widespread. Now, many citizens in the European Union have lost confidence in the ability of their central bank to manage financial crises. What factors influence the extent to which the European public will trust the European Central Bank (ECB) and by consequence delegate authority in monetary policy to it? We argue that if citizens are more optimistic about economic recovery, they will be more likely to trust the ECB and thus delegate authority to it. We test our arguments using Eurobarometer data and find that economic optimism has a strong impact on both trust in and delegation to the ECB.