2. Central Bank Reform: Ideas and Institutions

Significance The Vollgeld (sovereign money) proposal, which claimed to make the banking system safer by preventing commercial banks creating money through requiring thems to keep 100% of their deposits at the central bank, was complex and economically flawed, However, it attracted anti-system and anti-bank votes and has generated debate in Switzerland and abroad on financial stability and monetary systems. Impacts The Vollgeld idea has never been implemented anywhere, posing uncertainty about economic agents' reactions and the overall impact. The reform, if used to finance budget deficits, would challenge the central bank's independence. Even if the proposal is refined, the power that 'Vollgeld' would give the central bank to determine lending will remain unpopular. Pressure for banking reform and awareness of regulation have risen worldwide since the 2008-09 crisis making other initiatives likely.

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Big Business Lobbying in Japan: The Case of Central Bank Reform

American Political Science Review ◽

10.2307/1952681 ◽

1961 ◽

Vol 55 (3) ◽

pp. 527

Author(s):

Frank C. Langdon

Keyword(s):

Central Bank ◽

Big Business ◽

Bank Reform ◽

Business Lobbying

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Democratization and Institutional Change in Mexico

Comparative Political Studies ◽

10.1177/0010414001034001001 ◽

2001 ◽

Vol 34 (1) ◽

pp. 3-29 ◽

Cited By ~ 9

Author(s):

DELIA M. BOYLAN

Keyword(s):

Economic Policy ◽

Central Bank ◽

Institutional Change ◽

Design Rules ◽

Policy Choices ◽

Bank Reform ◽

Autonomous Agency

This article builds on previous work examining the incentives facing authoritarian elites to use central bank reform to constrain the economic policy choices of future governments. It suggests that because creating an autonomous agency is costly, authoritarian elites will only cede policymaking powers to an independent body commensurate with the degree of democratic threat that they face. When a transition is looming, insulation should be complete so as to tie the hands of successor governments to the greatest extent possible. But when this risk of replacement is milder, incumbent elites will be careful to design rules that continue to afford them some margin of maneuver as long as they remain in office. The Mexican central bank reform of 1993 is used as an illustration of the partial insulation strategy at work.

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