One Money, One Voice? Evaluating Ideological Positions of Euro Area Central Banks

We estimate a novel text based ideal point model (TV-TBIP) for two main topics central bankers communicate about, namely monetary policy and financial stability. This is used to evaluate the content of speeches based on the ideological position of the speaker. We find that the ECB transitions between a high ideal point state reminiscent of interventionist monetary policy and their effects on financial markets and a low ideal point state with emphasis on risks to fragmentation from monetary policy and financial stability policies. The individual euro area central banks tend to mirror the ECB’s position which suggests that some specialization / coordination of responsibilities takes place within the euro area system of central banks. For the national central banks changes between the states occur gradually and generally during crisis periods. In contrast, the ECB’s ideological position is very stable