Suchergebnisse

During the past decades, central banks acquired considerable independence from democratic institutions under the Central Bank Independence (CBI) template. Yet, the changing role of central banks since the 2007–2008 crisis has led to a (re)politicization of central banking and has weakened the scientific and political consensus on the CBI model. In turn, central bankers have tried to neutralize repoliticization and these efforts have shaped their unconventional monetary policies. In this chapter, we review how the (critical) political economy literature has scrutinized the evolving role of central banks this last decade, and we debunk central banks' depoliticization strategies. First, we examine how financial power shapes central banks' unconventional policies to the benefit of private finance. Second, we analyze how these "high-finance" struggles affects "low-finance," that is, what are the distributive effects of post-crisis monetary policy on firms and households? Finally, we review current debates on alternative monetary tools, which could potentially fare better than current monetary arrangements in distributive, ecological, and democratic terms.

During the past decades, central banks acquired considerable independence from democratic institutions under the Central Bank Independence (CBI) template. Yet, the changing role of central banks since the 2007–2008 crisis has led to a (re)politicization of central banking and has weakened the scientific and political consensus on the CBI model. In turn, central bankers have tried to neutralize repoliticization and these efforts have shaped their unconventional monetary policies. In this chapter, we review how the (critical) political economy literature has scrutinized the evolving role of central banks this last decade, and we debunk central banks' depoliticization strategies. First, we examine how financial power shapes central banks' unconventional policies to the benefit of private finance. Second, we analyze how these "high-finance" struggles affects "low-finance," that is, what are the distributive effects of post-crisis monetary policy on firms and households? Finally, we review current debates on alternative monetary tools, which could potentially fare better than current monetary arrangements in distributive, ecological, and democratic terms.

"In response to the current global crisis, the U.S. Federal Reserve and other central banks around the world have implemented diverse policy measures, including purchasing a wide range of securities, lending to financial institutions, intervening in foreign exchange markets, and paying interest on reserves. Some central banks have also reduced monetary policy interest rates to minimum levels (reaching a lower bound) and have announced an explicit commitment to keep interest rates there for a prolonged period. This set of instruments contrasts with a conventional view—embedded in the predominant monetary policy models—in which a central bank controls only a short-term interest rate, such as the Federal Funds rate. Some of the previous actions may be classified as responses to increasing demand for liquidity in a context of enormous financial uncertainty. Examples of this liquidity provisioning by central banks are the repurchase operations initiated in many economies to provide U.S. dollar liquidity during the period surrounding the bankruptcy of Lehman Brothers. Other actions may be sorted into those attempting to deal with malfunctioning financial markets (insufficient lending to nonfinancial firms or high lending spreads) and those attempting to enhance the monetary policy stimulus under the lower-bound constraint."

An examination of the post-recession responsibilities of central banks, this book proposes adaptations to the central banking model that preserve the advantages in terms of inflation control brought by their independence, while taking into account the long-term consequences of the Great Recession.