Suchergebnisse

There has been little discussion of central bank accountability in recent decades because monetary policy has been seen as an essentially technical problem. Yet, during the 2008 financial crisis and the economic dislocations that ensued, central banks gained considerably in authority—bailing out failing institutions, using unorthodox monetary tools, and wading into sovereign debt crises. At the same time, the financial crisis and the slow recovery that has followed have revealed just how uncertain and volatile the global economy can be—a situation that poses new dilemmas for monetary policy. This article looks at the existing model of central bank accountability and finds it wanting in this new, more uncertain environment. Because the principle of central bank independence involves a very narrow set of objectives—generally focused on an inflation target—and very few opportunities for sanction, the main mechanism for accountability is that provided by the publication of information about the bank's deliberations and activities. In an era of increased economic uncertainty, when central bankers themselves admit that simple rules and models are no longer adequate, a narrow, transparency-based form of accountability is not sufficient. I suggest that we need a thicker, more robust form of accountability that fosters more deliberation and debate, ensures that central banks are answerable to their publics, and broadens the standards by which they are judged.

The first part of this paper outlines the concept of democratic accountability of central banks, and compares the legal accountability of the ECB with some other central banks (Bank of Canada, Bank of Japan, Bank of England and the Federal Reserve System). In the second part, we present a theory of central bank accountability. Two aspects of accountability are considered: transparency of actual monetary policy and the question of who bears final responsibility for monetary policy. The paper shows that accountability through transparency leads to a lower expected rate of inflation and less stabilization of supply shocks. Accountability through shifting final responsibility in the direction of the government leads to higher inflationary expectations and more stabilization of supply shocks. ; Der erste Teil dieses Papiers umreißt das Konzept der demokratischen Rechenschaftslegung von Zentralbanken und vergleicht die gesetzlich festgelegte Rechenschaftspflicht der EZB mit der einiger anderer Zentralbanken (Bank of Canada, Bank of Japan, Bank of England und Federal Reserve System). Im zweiten Teil stellen wir eine Theorie über die Rechenschaftspflicht der Notenbanken vor. Dabei werden zwei Aspekte der Rechenschaftspflicht in Betracht gezogen: die Transparenz der aktuellen Geldpolitik und die Frage, wer die endgültige Verantwortung für die Geldpolitik trägt. Das Papier zeigt auf, dass die Rechenschaftspflicht mittels Transparenz zu einer erwarteten niedrigeren Inflationsrate und einer geringeren Stabilisierung von Angebotsschocks führt. Dagegen führt die Rechenschaftspflicht mittels Verlagerung der endgültigen Verantwortung hin zur Regierung zu höheren Inflationserwartungen und einer stärkeren Stabilisierung von Angebotsschocks.

The first part of this paper outlines the concept of democratic accountability of central banks, and compares the legal accountability of the ECB with some other central banks (Bank of Canada, Bank of Japan, Bank of England and the Federal Reserve System). In the second part, we present a theory of central bank accountability. Two aspects of accountability are considered: transparency of actual monetary policy and the question of who bears final responsibility for monetary policy. The paper shows that accountability through transparency leads to a lower expected rate of inflation and less stabilization of supply shocks. Accountability through shifting final responsibility in the direction of the government leads to higher inflationary expectations and more stabilization of supply shocks.

According to the European Union Treaties, the European Central Bank (ECB) is accountable to the European Parliament. In practice, this accountability takes mainly the form of a quarterly Monetary Dialogue between the president of the ECB and the European Parliament Economic and Monetary Affairs committee. We assess the impact of the Monetary Dialogue. We describe the ECB's accountability practices, compare them to those of other major central banks and provide an assessment of the dialogue in the last five years. The Monetary Dialogue could be improved and we make recommendations on this. We also consider what role the Monetary Dialogue could play in the current context of the ECB's evolving role. We discuss in particular forward guidance and quantitative easing. We review the main features and the way in which those policies have been implemented by other central banks. We then suggest the appropriate role for the Monetary Dialogue in relation to each of those policies. We conclude with some observations on the function of the Monetary Dialogue after the establishment of a banking union in Europe

Measures of central banks' independence and central banks' accountability which are based on an interpretation of their statutes provide, in themselves, no guidance for the assessment of legislative proposals. In the effectiveness of monetary policy, the crucial considerations relate to how central banks and other policymakers behave. The pattern of incentives is not determined by the statutes, which may be wholly irrelevant, and therefore one cannot discover the effectiveness of policy by inspecting the statutes. On the other hand, an assessment of the democratic acceptability of an arrangement requires a normative argument. Depending on that argument, statutory characteristics may be the crucial ones, but for the assessment to be worthwhile, the argument must be explicit.

Measures of central banks' independence and central banks' accountability which are based on an interpretation of their statutes provide, in themselves, no guidance for the assessment of legislative proposals. In the effectiveness of monetary policy, the crucial considerations relate to how central banks and other policymakers behave. The pattern of incentives is not determined by the statutes, which may be wholly irrelevant, and therefore one cannot discover the effectiveness of policy by inspecting the statutes. On the other hand, an assessment of the democratic acceptability of an arrangement requires a normative argument. Depending on that argument, statutory characteristics may be the crucial ones, but for the assessment to be worthwhile, the argument must be explicit.

Central banks are not traditionally thought of as being socially accountable. In fact, the main innovation of central banks in the 20th century was to make them largely independent from political influence. Thus, the prevailing (economic) analyses of central bank accountability have examined the formal relationships of accountability to political bodies such as the legislature and the executive. However, this article argues that trends in monetary policy-making beginning in the 1990s inadvertently led to the potential for greater social accountability of central banks. Driven by a shifting economic consensus, central banks moved from an approach of secretive currency management to transparent communication with the market. This transformation was prompted by new beliefs about the efficiency of monetary policy. This article argues that the current 'hard law' framework for central bank accountability does not reveal all of the social mechanisms in place. In fact, 'soft law' instruments are causing more and faster institutional changes in the legal framework for the central bank accountability. The role of law is changing accordingly: central banks have their actions controlled in an ex postmodel of supervision rather than an ex anteform. This study explores the institutional development of accountability mechanisms in two central banks in advanced economies (the US Federal Reserve and the European Central Bank) and in a monetary authority in an emerging economic power(the Brazilian Central Bank). All the three central banks had the same institutional development, despite the significant differences in terms of political, social and economic contexts in which they operate.