How should large and small countries be represented in a currency union?

We present a simple model of optimal representation in a federal central bank that balances two opposing forces: the wish to insulate common monetary policy from changing preferences at the national level, and the attempt to avoid an overly active or passive reaction to idiosyncratic national economic shocks. A perfect match between economic size and voting rights is rarely optimal, and neither is the “one country, one vote principle”. There are indications that the pattern of over- and under-representation of member countries in the ECB Council might be extreme.