September 21, 2016 - by Kurt Huebner, IES University of British Columbia
NEW WORKSHOP: NEW ROLES FOR CENTRAL BANKS?
February 2-3, 2017, at the Institute for European Studies (IES) of the University of British Columbia in Vancouver.
Call for Papers, Deadline for abstracts: 31.10.2016, Notification of accepted abstracts: 15.11.2016, Deadline for conference papers: 16.01.2017
The financial and economic crises since 2007 have pulled central banks into the spotlight, seeing them first fight financial panics, then recession and the threat of deflation. Consequently central bankers’ tool kits have changed substantially and now compromise instruments that go far beyond the setting of short-term interest rates. Never before have central banks been so critical for safeguarding market capitalism in times of economic and political challenges. In many places, central banking has become the only game in town (El-Erian 2016). In the words of Mario Draghi (2016): “With rare exceptions, monetary policy has been the only policy in the last four years to support growth.”
As a consequence central bankers, who normally pride themselves for being boring and cautious technocrats, now find themselves in the midst of fierce political debates. They have been blamed for overstepping their mandates, failing to prevent the last crisis, and setting the stage for the next one. Since it is increasingly recognized that monetary policies have hefty direct and indirect implications for governments’ general economic policies, central banks have become ever more political and politicized institutions.
Arguably, the European Central Bank (ECB) has undergone the greatest transformation – from single-minded inflation-fighter to lender of last resort to banks and governments. At the same time, it has become the most contested central bank in the Western world. As the world’s only central bank without a state, the ECB’s Governing Council comprises members from heterogeneous countries, with different business cycles and different economic problems. The contested issues the ECB faces range from the legality of its programs and the lender of last resort-function, to the TARGET mechanisms and implications of its monetary policies for fiscal policy and structural reforms in member countries.