Abstract
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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Articles in the same Issue
- Frontmatter
- Research Articles
- The Democratic Challenge of Central Bank Credit Policies
- The Changing and Growing Roles of Independent Central Banks Now Do Require a Reconsideration of Their Mandate
- Is Asking Questions Free of Charge? Questioning the Value of Independent Central Banks through the Lens of a European Credit Council
- The Democratic Dangers of Central Bank Planning
- A European Credit Council for Consistent and Informed Policymaking
- The Case for a European Credit Council: Historical and Constitutional Fine-Tuning
- A European Credit Council? Lessons from the History of Italian Central Banking after World War II
- The Power of Coordination and Deliberation
- The Credit Council in the US Context
- Democratic Central Banking: Power Not Deliberation
Articles in the same Issue
- Frontmatter
- Research Articles
- The Democratic Challenge of Central Bank Credit Policies
- The Changing and Growing Roles of Independent Central Banks Now Do Require a Reconsideration of Their Mandate
- Is Asking Questions Free of Charge? Questioning the Value of Independent Central Banks through the Lens of a European Credit Council
- The Democratic Dangers of Central Bank Planning
- A European Credit Council for Consistent and Informed Policymaking
- The Case for a European Credit Council: Historical and Constitutional Fine-Tuning
- A European Credit Council? Lessons from the History of Italian Central Banking after World War II
- The Power of Coordination and Deliberation
- The Credit Council in the US Context
- Democratic Central Banking: Power Not Deliberation