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Independence of Central Banks: The Need for an Urgent Revamp!

Independence of Central Banks: The Need for an Urgent Revamp! AbstractOver the last years, independent central banks were often criticized. Many critics felt that the fatal flaw of the current system lied in its independent nature. Some critics argued that the remedy to such problems was to replace independence with interdependence. Such a drastic measure is completely unnecessary. No more time should be lost discussing further the merits or the weaknesses of central bank independence. But taking central bank independence as a given, one should simply try to equip central bankers with the mandates, the tools, and the values best fitted to help them face future shocks. Deeper checks and balances with other institutions and the fair financing of investment by all economic agents, including startups and SMEs, are urgently necessary to head off financial crises that will inevitably arise in this era of growing wealth inequality, disruptive technologies and climate change. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting, Economics and Law de Gruyter

Independence of Central Banks: The Need for an Urgent Revamp!

Moutot, Philippe
Accounting, Economics and Law , Volume 13 (2): 35 – May 1, 2023
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Publisher
de Gruyter
Copyright
© 2020 CONVIVIUM, association loi de 1901
ISSN
2151-2820
eISSN
2152-2820
DOI
10.1515/ael-2019-0070
Publisher site
See Article on Publisher Site

Abstract

AbstractOver the last years, independent central banks were often criticized. Many critics felt that the fatal flaw of the current system lied in its independent nature. Some critics argued that the remedy to such problems was to replace independence with interdependence. Such a drastic measure is completely unnecessary. No more time should be lost discussing further the merits or the weaknesses of central bank independence. But taking central bank independence as a given, one should simply try to equip central bankers with the mandates, the tools, and the values best fitted to help them face future shocks. Deeper checks and balances with other institutions and the fair financing of investment by all economic agents, including startups and SMEs, are urgently necessary to head off financial crises that will inevitably arise in this era of growing wealth inequality, disruptive technologies and climate change.

Journal

Accounting, Economics and Law – de Gruyter

Published: May 1, 2023

Keywords: monetary policy; financial stability; Central Bank independence; start-ups; climate change

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