Is Asking Questions Free of Charge? Questioning the Value of Independent Central Banks through the Lens of a European Credit Council

Thiemann, Matthias

doi:10.1515/ael-2022-0108

Cited by 3 publications

(2 citation statements)

References 16 publications

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“…5 Some economists, however, argue that we may be in an era of fiscal dominance (White, 2021). 6 More specifically, Thiemann (2023) argues that there may need to be a democratic debate on the balance between central banks' inflation objectives and the low-carbon transition, which in turn could lead to the conclusion that to achieve the latter we may be forced to abandon the former. Thiemann argues that a case can even be made that central banks' regular interventions to save financialized capitalism aggravate the situation from a climate perspective.…”

Section: Discussionmentioning

confidence: 99%

“…The legitimacy of this stance is not obvious given the crucial role of other types of expertise, notably legal, in shaping the economy, policies, and capital allocation (e.g., Pistor, 2019). Some argue that central banks' powers must be partly reined in or at least seriously questioned (e.g., Dietsch et al, 2018), and their potential role in credit guidance (following the proposals of Monnet, 2021, 2023) should occur within a “web of institutions, including public development banks, which take such decisions based on the formulation of political will” (Bolton et al, 2020a; Thiemann, 2023). 6 More broadly, some argue that ecological threats pose a normative challenge to societies: public policies and policy frameworks must anticipate retrospective ethical judgment of present choices, an endeavor that cannot be left to central banks or indeed economic expertise alone (Dupuy, 2022).…”

Section: View #3: the Evolutionary Role Of Central Banks Financial Su...mentioning

confidence: 99%

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Three tales of central banking and financial supervision for the ecological transition

Oman,

Salin,

Svartzman

2024

WIREs Climate Change

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The academic literature and policy discussions on the role that central banks and financial supervisors (CBFS) should play in the ecological transition, almost nonexistent five years ago, have since grown at an impressive pace. This has resulted in a wide range of proposals that often generate debates and even misunderstandings, for lack of a coherent analytical framework. Against this backdrop, this article provides a comprehensive overview of the different theoretical backgrounds and worldviews that inform existing proposals, and discusses the challenges and debates they generate when assessed from other perspectives. We identify three main approaches, or three “tales” of central banking and financial supervision in the face of ecological threats: (i) one that argues that CBFS should focus on assessing the (so‐called “physical” and “transition”) risks that environmental issues pose to price and/or financial stability; (ii) one that places great emphasis on the ability of CBFS to help trigger systemic change, and thereby promotes proactive actions by CBFS to steer financial markets toward greening their activity beyond a risk‐based approach; (iii) one that sees CBFS transformation as necessary but part of broader institutional change that they cannot deliver on their own, thereby requiring an evolutionary perspective. Through this comprehensive literature review, this article seeks to provide a coherent framework through which future academic contributions and policy proposals can be better understood and assessed.This article is categorized under: Climate Economics > Economics and Climate Change Climate Economics > Economics of Mitigation

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Section: Discussionmentioning

confidence: 99%

Section: View #3: the Evolutionary Role Of Central Banks Financial Su...mentioning

confidence: 99%

Three tales of central banking and financial supervision for the ecological transition

Oman,

Salin,

Svartzman

2024

WIREs Climate Change

View full text Add to dashboard Cite

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Central Banking in Perilous Times: An Open-Ended Chronicle

Biondi

2023

Accounting, Economics, and Law: A Convivium

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Conventional understanding relegates the role of central banking to benchmark interest rate guidance which is supposed to have direct and straightforward impact on real economy. Accordingly, central banks are praised for and supposed to stay independent from treasuries and money markets while indirectly influencing both of them by that guidance. This article provides hints for an alternative explanation by investigating central bank dual connection with treasuries and private finance, especially money markets. It recounts the main financial episodes of the last decades from this institutional monetary economic perspective through a dynamic systems analysis covering money and financial aggregates, pointing to the peculiar ways in which this connection has been organised under the market-based (asset-based) finance regime and its systemic failure since 2007.

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The Credit Council in the US Context

Feldmann

2024

Accounting, Economics, and Law: A Convivium

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The proper role of central banks – in the US the Federal Reserve – is again up for scrutiny and criticism as the consequences of the monetary policies of the Great Financial Crisis (GFC) are fully revealed. Into the debate comes the proposal of an updated version of the Credit Council, an institution that worked alongside central banks in many European countries in the adjustment from a wartime to a peacetime economy post WWII. The renovated and reconstituted European Credit Council, as conceived by Eric Monnet of the Paris School of Economics, would participate as an aid to both the legislature and central banks in developing and monitoring monetary policy. Monnet sees additional institutional oversight to be essential as central banks confront the multifaceted challenges of escaping from GFC experimental policies and dealing with emerging challenges such as the Green Transition and social inequality. Monnet’s idea has its supporters and critics in the European context. This paper attempts to assess the utility and efficacy of the Credit Council in the US context, using: (i) the EU criticisms to anticipate and respond to likely objections from US critics; and (ii) the current Fed reform debate in the US to gauge potential fit and acceptance. The conclusion, in brief, is that the Monnet CC concept could fit well within the US context and is a potentially useful mechanism for enhancing democratic responsiveness and adding to policy legitimacy as the Fed deals with existing and imminent monetary arena challenges.

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Is Asking Questions Free of Charge? Questioning the Value of Independent Central Banks through the Lens of a European Credit Council

Cited by 3 publications

References 16 publications

Three tales of central banking and financial supervision for the ecological transition

Three tales of central banking and financial supervision for the ecological transition

Central Banking in Perilous Times: An Open-Ended Chronicle

The Credit Council in the US Context

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