Estonia, Slovenia and Hungary: Banking on Identity

A powerful new institution, the independent central bank, emerged rapidly from the transformation of inherited financial systems in postcommunist Central and Eastern Europe (CEE). Its power entailed the ability to define macroeconomic stability as a policy priority, institutionalize it against rival preferences, and shape economic performance in line with its own agenda. However, rather than converging on a single uniform model, the new central banks adopted varied institutional features. They also diverged in terms of their performance and central bankers’ identities.