Abstract
Two major economic crises in the early twenty-first century have had a serious impact on monetary policy and CB independence. Disruption in financial intermediation and associated deflationary pressures caused by the global financial crisis of 2007–2009 and European financial crisis of 2010–2015 pushed central banks (CBs) in major currency areas towards adoption of unconventional monetary policy measures, including large-scale purchase of government bonds (quantitative easing). The same approach has been taken by CBs in response to the COVID-19 crisis in 2020 even if the characteristics of this crisis differ from the previous one. As a result of both crises, CBs have become major holders of government bonds and de facto – main creditors of governments. Against rapidly deteriorating fiscal balances, CBs have become hostages of fiscal policies, which compromises their independence. Risks to the CB independence also come from their additional mandates (beyond price stability) and populist political pressures.
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© 2023 CONVIVIUM, association loi de 1901
Articles in the same Issue
- Frontmatter
- Research Articles
- Central Banking in Perilous Times: An Open-Ended Chronicle
- The Future of Central Banking
- Independence of Central Banks: The Need for an Urgent Revamp!
- Two Major Economic Crises in the Early Twenty-First Century and their Impact on Central Bank Independence
- What Is the European Central Bank Supposed to Do?
- Central Banks of the Visegrad Group States in the Light of Constitutional Regulations
- Book Commentary on “Financial Citizenship: Experts, Publics, and the Politics of Central Banking” by Anne-Lise Riles
Articles in the same Issue
- Frontmatter
- Research Articles
- Central Banking in Perilous Times: An Open-Ended Chronicle
- The Future of Central Banking
- Independence of Central Banks: The Need for an Urgent Revamp!
- Two Major Economic Crises in the Early Twenty-First Century and their Impact on Central Bank Independence
- What Is the European Central Bank Supposed to Do?
- Central Banks of the Visegrad Group States in the Light of Constitutional Regulations
- Book Commentary on “Financial Citizenship: Experts, Publics, and the Politics of Central Banking” by Anne-Lise Riles