scholarly journals Central Banking and Inequalities: Old Tropes and New Practices

2021 ◽  
Author(s):  
Clément Fontan ◽  
Peter Dietsch ◽  
François Claveau ◽  
Jérémie Dion
Keyword(s):  
Federal Reserve ◽  
Critical Analysis ◽  
Policy Instruments ◽  
Central Banks ◽  
Central Banking ◽  
Computer Assisted ◽  
Bank Of Canada ◽  
The One ◽  
Central Bankers ◽  
Do So

This paper presents a critical analysis of the stance taken on inequality by two central banks since 2015: the Bank of Canada (BoC) and the Federal Reserve (Fed). The analysis is informed by a computer-assisted discourse analysis of how central bankers from the two institutions position themselves when it comes to issues of inequality. We observe that the position on inequality of the two central banks has changed in recent years and continues to do so. We argue that the stance on inequality taken by the BoC and the Fed suffers from a number of both inconsistencies and shortcomings. On the one hand, the BoC and the Fed claim that monetary policy instruments are too blunt to target specific sectors of the economy. On the other hand, with their response to COVID-19, they have demonstrated that such targeting is possible after all.

Deeds and Doctrines of the Central Bankers

2018 ◽  
Author(s):  
Louçã Francisco ◽  
Ash Michael
Keyword(s):  
Federal Reserve ◽  
The United States ◽  
Central Banks ◽  
Central Banking ◽  
Decision Makers ◽  
Soft Money ◽  
The Us ◽  
History Of ◽  
Great Crash ◽  
Central Bankers

Chapter 6 locates historically the doctrine and practice of central bank independence. It uses the illustrious career of Alan Greenspan, former Chair of the US Federal Reserve to introduce a history of central banking. Greenspan advocated ceaselessly for the deregulation of finance thanks to his faith in private decision makers keeping an eye on themselves and their debtors. That faith that was shattered by the crisis of 2007–8. A history of US banking shows how banking has swung between hard money and soft money. Finance serves the powerful but has always been contested ground, be it between competing elites such as agrarian and financial-industrial interests fighting over the first central banks of the United States, or between an elite and the dispossessed after the Great Crash of 1929. Brief histories of banking in several European countries are provided.

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 How central bankers learned to love financialization: The Fed, the Bank, and the enlisting of unfettered markets in the conduct of monetary policy

2019 ◽  
Vol 18 (3) ◽  
pp. 625-653 ◽  
Author(s):  
Timo Walter ◽  
Leon Wansleben
Keyword(s):  
Inflation Targeting ◽  
Central Banks ◽  
Central Banking ◽  
Asset Bubbles ◽  
Benign Neglect ◽  
Policy Frameworks ◽  
Financial Growth ◽  
Institutional Foundations ◽  
Central Bankers ◽  
Infrastructural Power

Abstract Central banks’ role in financialization has received increasing attention in recent years. These debates have predominantly revolved around authorities’ ‘benign neglect’ of asset bubbles, their deregulatory policies, and the safety nets they provide for speculative exuberance. Most analyses refer to the dominance of pro-market interests and ideas to explain these actions. The present article moves beyond these accounts by showing how an alignment between techniques of monetary governance and ‘unfettered’ financial markets can explain central banks’ endorsement of increasingly fragile structures of liquidity and their strategic ignorance towards growing amounts of debt. We analyze the processes of abstraction and formalization by which the ‘programmes’ and ‘technologies’ of monetary governance have been made compatible with the texture of contemporary finance; and we show how central banks’ attempts to make markets more amenable to their methods of policy implementation shaped new conduits for financial growth. As empirical cases, we discuss the Federal Reserve’s experiments with different policy frameworks in the 1980s and the Bank of England’s twisted path to inflation targeting from 1979 to 1997. These cases allow us to demonstrate that the infrastructural power of contemporary central banking is predicated on the same institutional foundations that have made financialization possible.

Monetary Policy Operations of Central Banks in the E7 Economies

2020 ◽  
pp. 65-91
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Crucial Role ◽  
Policy Instruments ◽  
Active Role ◽  
Central Banks ◽  
Central Banking ◽  
Fiscal Policies ◽  
Monetary Policies ◽  
Sustainable Economic Growth

Both monetary and fiscal policies have a crucial role in the financial markets of the countries. In this framework, policies can be used for mainly two different purposes, which are contractionary and expansionary policies. Hence, it can be said that monetary policies play a key role especially for the emerging economies. The main reason is that these are the economies that aim to be a developed economy. In order to reach this objective, they aim to make investment to obtain sustainable economic growth. Similar to this aspect, this chapter aims to identify different monetary policy operations of the central banks. Thus, various monetary policy instruments are explained. After this issue, necessary information is given related to the central banking operations of E7 economies. As a result, it is defined that central banks of these countries play an active role especially during the recession period.

Trust, But Verify: The Road Ahead

2017 ◽  
Author(s):  
Pierre L. Siklos
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Policy Instruments ◽  
Central Banks ◽  
Central Banking ◽  
Price Stability ◽  
The Road ◽  
The Past ◽  
Economic Downturns ◽  
More Care

Taking stock of the past fifteen years in monetary policy leads to some conclusions and suggestions for reform. Contrary to the claims of some observers, price stability remains an unassailable goal of central banks. Reforms are needed in their governance, however. In particular, legislation ought to include more directives to make clear the conditional relationship between government and the central bank. Unconventional central bank policies are no longer so unconventional. While they should be included in the toolkit of policy instruments, they should be used with more care. Some central banks have overreached and have confused the need to put a floor on economic downturns with the need for economic growth to rise to levels deemed normal. Data dependence as a policy stance reflects one of the biggest failures of central banking. After more than a decade of explaining the forward-looking nature of monetary policy, a backward-looking perspective seems to dominate policy discussions.

Some results of research on new crisis predictors

2020 ◽  
pp. 86-106 ◽  
Author(s):  
Yu. A. Danilov ◽  
D. A. Pivovarov ◽  
I. S. Davydov
Keyword(s):  
Monetary Policy ◽  
Federal Reserve ◽  
Critical Analysis ◽  
Financial Stability ◽  
Central Banks ◽  
Stability Function ◽  
Treasury Bonds ◽  
Global Crisis ◽  
The Us ◽  
New Generation

The article provides some assumptions and hypotheses that have arisen as a result of a critical analysis of a new generation of crisis predictors. Three assumptions/hypotheses are submitted to the reader’s court: 1) on the possible impact of the negative spread of the yield on US Treasury bonds on the decisions of the US Federal Reserve; 2) on the effect of the central banks fulfilling the financial stability function on their monetary policy; 3) on the existence of objective reasons for Russia’s later entry into the global crisis of 2007—2009. The latter circumstance, along with the fact that some of the Russian recessions have significant internal causes, indicates the need for forming domestic crisis predictors. The assumptions and hypotheses cited in the article are debatable.

scholarly journals Central Banking in Rawls’s Property-Owning Democracy

2018 ◽  
Vol 47 (5) ◽  
pp. 674-698 ◽  
Author(s):  
Jens van ’t Klooster
Keyword(s):  
Central Bank ◽  
Federal Reserve ◽  
Central Banks ◽  
Central Banking ◽  
Difference Principle ◽  
Justice As Fairness ◽  
The Us ◽  
Democratic Control ◽  
The Difference ◽  
The Government

The dramatic events of the crisis have reignited debates on the independence of central banks and the scope of their mandates. In this article, I contribute to the normative understanding of these developments by discussing John Rawls’s position in debates of the 1950s and 1960s on the independence of the US Federal Reserve. Rawls’s account of the central bank in his property-owning democracy, Democratic Central Banking (DCB), assigns authority over monetary policy directly to the government and prioritizes low unemployment over price stability. I contrast DCB with Central Bank Independence (CBI), which requires that the central bank is independent of the government and pursues low inflation. I evaluate DCB by asking whether justice as fairness requires democratic control of the central bank and argue that it does not. Instead, so I argue, the choice between DCB and CBI should be justified in terms of the difference principle. By reflecting on central banking in a property-owning democracy, I cast new light on the Rawlsian realistic utopia of a just capitalist society, while also investigating democratic objections to today’s independent central banks.

scholarly journals Central banking beyond inflation

2021 ◽  
Author(s):  
Benjamin Braun
Keyword(s):  
Policy Instruments ◽  
Central Banks ◽  
Central Banking ◽  
The European Union ◽  
Social Challenges ◽  
The Third ◽  
Social Disintegration ◽  
The World ◽  
History Of ◽  
Strategic Ignorance

The world around central banks has shifted. Europe is confronting an unprecedented combination of environmental, economic, and social challenges. Reducing carbon emissions to zero fast enough to avoid catastrophic global warming is difficult; doing so while also reducing economic inequality so as to avert social disintegration and democratic backsliding is very difficult. Addressing this twin challenge will require the state – and the European Union – to deploy all economic policy instruments already at its disposal, and to develop new ones and coordinate their use in new ways. The paper proceeds in three steps. The first section discusses three distinct challenges – legal, political, and ideational – for the debate on the future of central banking. The remainder of the paper will tackle the two main ideational challenges, namely, institutional amnesia (forgetting past realities of central banking) and strategic ignorance (ignoring present realities of central banking). To overcome institutional amnesia, the second section briefly reviews the history of central banking, showing that the price stability is only one of several goals that central banking has, historically, been associated with. To overcome strategic ignorance, the third section reviews three mandate-remote, or ‘extracurricular’ areas of recent ECB activity.

scholarly journals Adding rooms onto a house we love: Central banking after the Global Financial Crisis

2018 ◽  
Author(s):  
Juliet Johnson ◽  
Vincent Arel-Bundock ◽  
Vladislav Portniaguine
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Text Analysis ◽  
Global Financial Crisis ◽  
Central Banking ◽  
Computer Assisted ◽  
Policy Paradigm ◽  
Crisis Conditions ◽  
The Global Financial Crisis ◽  
Central Bankers

This article examines the extent to which central bankers have been willing and able to rethink their beliefs about monetary policy in the wake of the Global Financial Crisis. We show that despite the upheaval, the core pre-crisis monetary policy paradigm remains relatively intact: central bankers believe that they should primarily pursue price stability through targeting low inflation in a transparent manner, and that they need operational independence to achieve this goal. In a bid to address post-crisis conditions and maintain their credibility, however, central bankers have also layered new elements onto the old core. We document both the resilience of pre-crisis beliefs and the process of layering using computer-assisted text analysis and qualitative analysis of 13,586 speeches given between 1997 and 2017 by central bankers from around the world.

Bases of Credit

2016 ◽  
Author(s):  
Simon James Bytheway ◽  
Mark Metzler
Keyword(s):  
United States ◽  
Federal Reserve ◽  
The United States ◽  
Central Banks ◽  
Central Banking ◽  
Credit System ◽  
Institutional Practices ◽  
Global System ◽  
Reserve System

This introductory chapter provides a background of central banks. A century ago, when the Federal Reserve System was first established in the United States, central banks based their own creation of money and credit on their holdings of gold. These two institutional practices—central banking, and the use of gold as monetary reserves—were the bases of the world's first truly globalized credit system. This global system was originally centered in London, with the Bank of England at the center of the center. Today, the actions of central banks continue to move economies, perhaps even more than they did a century ago. Gold-backed currencies are a thing of the past, but central banks nonetheless remain the biggest owners of gold, while gold markets seem to have an ongoing monetary significance.

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