Central Banking

2016 ◽  
pp. 341-363
Author(s):  
Forrest Capie
Keyword(s):  
Twentieth Century ◽  
Central Bank ◽  
Financial Stability ◽  
Great Majority ◽  
Central Banks ◽  
Central Banking ◽  
Late Nineteenth Century ◽  
Financial Conditions ◽  
Late Nineteenth ◽  
Over Time

Central banks date from the late nineteenth century but the great majority from the twentieth century. They are institutions whose principal purpose is to provide stable monetary and financial conditions, though their functions have varied over time. Claims made for the banks’ powers have often been greater than was merited. This chapter sets out how central banks’ responsibilities arose and how they have been fulfilled. It gives particular attention to something that was almost lost sight of in recent years that of their traditional responsibility for financial stability. Other aspects of central banking are then discussed: the role they might have in supervision/regulation; central bank co-operation has played; and the meaning and desirability of central bank independence.

scholarly journals From Aristocratic to Ordinary: Shifting Modes of Elite Distinction

2020 ◽  
Vol 85 (2) ◽  
pp. 323-350 ◽  
Author(s):  
Sam Friedman ◽  
Aaron Reeves
Keyword(s):  
Nineteenth Century ◽  
Twentieth Century ◽  
Fine Arts ◽  
Cultural Practice ◽  
Late Nineteenth Century ◽  
Cultural Participation ◽  
Birth Cohorts ◽  
Elite Culture ◽  
Late Nineteenth ◽  
Over Time

How do elites signal their superior social position via the consumption of culture? We address this question by drawing on 120 years of “recreations” data ( N = 71,393) contained within Who’s Who, a unique catalogue of the British elite. Our results reveal three historical phases of elite cultural distinction: first, a mode of aristocratic practice forged around the leisure possibilities afforded by landed estates, which waned significantly in the late-nineteenth century; second, a highbrow mode dominated by the fine arts, which increased sharply in the early-twentieth century before gently receding in the most recent birth cohorts; and, third, a contemporary mode characterized by the blending of highbrow pursuits with everyday forms of cultural participation, such as spending time with family, friends, and pets. These shifts reveal changes not only in the contents of elite culture but also in the nature of elite distinction, in particular, (1) how the applicability of emulation and (mis)recognition theories has changed over time, and (2) the emergence of a contemporary mode that publicly emphasizes everyday cultural practice (to accentuate ordinariness, authenticity, and cultural connection) while retaining many tastes that continue to be (mis)recognized as legitimate.

The Over-Burdened Central Bank and the Shift Away from Autonomy

2017 ◽  
Author(s):  
Pierre L. Siklos
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Financial Stability ◽  
Central Banks ◽  
Central Banking ◽  
Forward Guidance ◽  
Self Assessments ◽  
Crisis Conditions ◽  
Central Bankers ◽  
Influence Behavior

Many central banks took on additional responsibilities. Inadequate self-assessments remain unfinished almost a decade after the crisis erupted. Government-central bank relationships need to be conditioned on whether times are normal versus crisis conditions. Transparency confronts ambiguity when central banks must communicate the outlook and the conditionality of their decisions. Forward guidance was taken too far and ended up being futile. Central bankers simply exhausted their ability to influence behavior through mere words or ambiguous statements. This is a self-inflicted wound for institutions that are seen as overburdened. These forces leave central banking more vulnerable than is commonly acknowledged. Squaring the conventional objectives of monetary policy with the unclear aims of financial stability is difficult. Adequate limitations on the authority of central banks have yet to be thoroughly debated. We are nowhere near resolving the inherent tensions between old and new sets of central bank objectives.

scholarly journals Law, Politics, and Financial Development: The Great Reversal of the U.K. Corporate Debt Market

2013 ◽  
Vol 73 (3) ◽  
pp. 810-846 ◽  
Author(s):  
Christopher Coyle ◽  
John D. Turner
Keyword(s):  
Twentieth Century ◽  
Financial Development ◽  
Bond Market ◽  
Corporate Bond ◽  
Late Nineteenth Century ◽  
Corporate Bond Market ◽  
Debt Market ◽  
Late Nineteenth ◽  
Over Time

This article examines the role of creditor protection in the development of the U.K. corporate bond market. This market grew rapidly in the late nineteenth century, but in the twentieth century it experienced a reversal, albeit with a short-lived post-1945 renaissance. Such was the extent of the reversal that the market from the 1970s onwards was smaller than it had been in 1870. We find that law does not explain the variation in the size of this market over time. Alternatively, our evidence suggests that inflation and taxation policies were major drivers of this market in the post-1945 era.

Central Banking before the Great Recession

2018 ◽  
Author(s):  
Francesco Papadia ◽  
Tuomas Vӓlimӓki
Keyword(s):  
Central Bank ◽  
Great Recession ◽  
Financial Stability ◽  
Central Banks ◽  
Central Banking ◽  
Price Stability ◽  
Great Moderation ◽  
The Great Recession ◽  
Advanced Economies ◽  
The Interest Rate

The chapter describes the historical process as well as the analytical and empirical factors that, at the end of the twentieth century, led to the dominance, in advanced economies, of a central bank model based on an independent institution devoted to price stability as its overriding objective. The central bank pre-crisis model was elegant, performing, and efficient. However, it could not easily accommodate the pursuit of a traditionally important central bank objective: financial stability. Indeed, since central banks have, in essence, just one tool, that is, the interest rate, the pursuit of a financial stability objective in addition to a price stability objective could create dilemma situations. In the two decades between the mid-1980s and the mid-2000s, the economies of advanced economies were very stable, and this period was thus identified as Great Moderation. However, subsequent experience showed that, in this period, the crisis was incubating.

Central Bank Independence

2021 ◽  
pp. 39-67
Author(s):  
Patrick Njoroge ◽  
Désiré Kanga ◽  
Victor Murinde
Keyword(s):  
Central Bank ◽  
Financial Stability ◽  
Financial Regulation ◽  
Central Banks ◽  
Central Banking ◽  
Central Bank Independence ◽  
First Century ◽  
Fiscal Discipline ◽  
Key Issues ◽  
Personal Accountability

The chapter covers central bank independence broadly and makes use of rich literature to bring out key issues on central bank independence from the inception of central banking in 1668 to the twenty-first century. The chapter identifies four measures of central bank independence mainly focusing on legal characteristics. The findings of the study point to benefits associated with independence of central banks, including management of inflation. Also, it is found that delegating monetary policy to an independent central bank increases debt sustainability and fosters fiscal discipline. It is noted that central bank independence needs to be reconciled with the requirements of institutional and personal accountability of the governors. Further, the financial regulation role should be strengthened in the mandates of central banks as the objective of price stability does not necessarily foster financial stability.

scholarly journals From Aristocratic to Ordinary: Shifting Modes of Elite Distinction

2020 ◽  
Author(s):  
Aaron Reeves ◽  
Sam Friedman
Keyword(s):  
Nineteenth Century ◽  
Twentieth Century ◽  
Fine Arts ◽  
Cultural Practice ◽  
Late Nineteenth Century ◽  
Cultural Participation ◽  
Birth Cohorts ◽  
Elite Culture ◽  
Late Nineteenth ◽  
Over Time

How do elites signal their superior social position via the consumption of culture? We address this question by drawing on 120 years of “recreations” data (N = 71,393) contained within Who’s Who, a unique catalogue of the British elite. Our results reveal three historical phases of elite cultural distinction: first, a mode of aristocratic practice forged around the leisure possibilities afforded by landed estates, which waned significantly in the late-nineteenth century; second, a highbrow mode dominated by the fine arts, which increased sharply in the early-twentieth century before gently receding in the most recent birth cohorts; and, third, a contemporary mode characterized by the blending of highbrow pursuits with everyday forms of cultural participation, such as spending time with family, friends, and pets. These shifts reveal changes not only in the contents of elite culture but also in the nature of elite distinction, in particular, (1) how the applicability of emulation and (mis)recognition theories has changed over time, and (2) the emergence of a contemporary mode that publicly emphasizes everyday cultural practice (to accentuate ordinariness, authenticity, and cultural connection) while retaining many tastes that continue to be (mis)recognized as legitimate.

scholarly journals Financial Stability Governance and Central Bank Communications

2021 ◽  
Vol 2021 (1328) ◽  
pp. 1-57
Author(s):  
Juan M. Londono ◽  
◽  
Stijn Claessens ◽  
Ricardo Correa ◽  
◽  
...  
Keyword(s):  
Financial Crisis ◽  
Central Bank ◽  
Conceptual Framework ◽  
Financial Stability ◽  
Communication Strategies ◽  
Central Banks ◽  
Financial Cycle ◽  
Financial Conditions ◽  
Using Data ◽  
Robust Evidence

We investigate how central banks' governance frameworks influence their financial stability communication strategies and assess the effectiveness of these strategies in preventing a worsening of financial cycle conditions. We develop a simple conceptual framework of how central banks communicate about financial stability and how communication shapes the evolution of the financial cycle. We apply our framework using data on the governance characteristics of 24 central banks and the sentiment conveyed in their financial stability reports. We find robust evidence that communications by central banks participating in interagency financial stability committees more effectively mitigate a deterioration in financial conditions and advert a potential financial crisis. After observing a deterioration in conditions, such central banks also transmit a calmer message, suggesting that the ability to use policy tools other than communications strengthens incentives not to just "cry wolf".

Modern Central Banking

2019 ◽  
pp. 573-601
Author(s):  
Frederic S. Mishkin
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Empirical Evidence ◽  
Financial Stability ◽  
New World ◽  
Central Banks ◽  
Central Banking ◽  
Scientific Principles ◽  
Brave New World ◽  
Almost All

This chapter examines how central banking has evolved in recent decades by looking at two main areas of central bank activities: monetary policy and financial stability policy. It starts by describing a set of nine basic scientific principles derived from theory and empirical evidence that now guide thinking at almost all central banks, which is referred to as the science of central banking. Then the essay discusses how the science of monetary policy provides a framework for understanding central bank governance and how modern central banks conduct monetary and financial stability policies. Central banking has entered a brave new world in which challenges have become greater and the conduct of policy has become more complex.

Rehabilitation

2019 ◽  
pp. 172-194
Author(s):  
Ulrich Bindseil
Keyword(s):  
Twentieth Century ◽  
Eighteenth Century ◽  
Central Bank ◽  
Balance Sheet ◽  
Central Banks ◽  
Central Banking ◽  
Joint Stock Company ◽  
Stock Company ◽  
Bank Of England ◽  
Eighteenth And Nineteenth Centuries

This chapter returns to the question who invented what in central banking. The review confirms broader and earlier origins of central banking, with particularly the early banks in Barcelona, Genoa, Naples, Venice, Amsterdam, and Hamburg having all made major contributions and actually having developed all central bank operations that would prevail until the early twentieth century (except discounting trade bills). The Bank of England invented the private ownership model based on a joint stock company, which became the template for most central bank creations in the eighteenth and nineteenth centuries, but has been considered outdated since the mid twentieth century. Moreover, it had the largest balance sheet amongst all central banks in the eighteenth century. The chapter ends with a list of 15 major current central bank topics which all can be traced back to before 1800, showing how relevant the study of early central banking remains.

Lender of Last Resort

2019 ◽  
pp. 136-154
Author(s):  
Ulrich Bindseil
Keyword(s):  
Central Bank ◽  
Financial Stability ◽  
Debt Crisis ◽  
Central Banks ◽  
Central Banking ◽  
Lender Of Last Resort ◽  
Central Bank Money ◽  
Bank Of England ◽  
European Debt Crisis ◽  
Bank Money

The recent central banking literature often argues that the LOLR function would be the key feature defining a ‘modern’ central bank. This chapter argues that this view may appear too radical (despite the enormous benefits of the LOLR) as the appearance of the LOLR does not change the nature of central banking (which is primarily associated with the issuance of central bank money). After providing an overview of the roles of central banks for financial stability, the chapter focuses on one early LOLR episode, namely the measures of the Hamburger Bank, Bank of Amsterdam and Bank of England in the European debt crisis of 1763. It is shown that in particular the Hamburger Bank acted as systemic lender of last resort, comparable to what modern central banks did in 2008.

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