« Back to all events

Central Banking in Europe Today: Over-Mighty or Under-Powered?

Dates:
  • Mon 27 Nov 2017 16.30 - 18.30
  Add to Calendar 2017-11-27 16:30 2017-11-27 18:30 Europe/Paris Central Banking in Europe Today: Over-Mighty or Under-Powered?

The ECB and other European Central Banks have never looked so powerful. They have driven interest rates below zero and purchased trillions of euros of government and other bonds. They have become more active in bank supervision – a function now also centralised for the euro zone in the ECB. Moreover, a much broader toolkit than used in past decades is being energetically employed. Having tested the limits of their mandates, the ECB and other European Central Banks are now unlikely to return to the light touch policy of the 1990s. However, some puzzles remain: Why is inflation in the euro area – the main statutory objective of the ECB – still below target? Why were these tools not employed earlier in the crisis? Is there more that could be done now, such as helicopter money ; and if so, should it be used? This lecture will explain how the crisis has gradually drawn the ECB into policy areas and instruments for which its mandate is less explicit, though no less real. The Frankfurt-based Bank has, in the past ten years, changed more than most central banks. Like other major central banks, it has had to innovate in response to developments in globalization, in commodity price fluctuations and in unusually large fiscal deviations. But in doing so the ECB has been faced with unique challenges of political legitimacy as well as of economic analysis in the multi-country currency union.

Conference Room - Villa La Fonte DD/MM/YYYY
  Conference Room - Villa La Fonte

The ECB and other European Central Banks have never looked so powerful. They have driven interest rates below zero and purchased trillions of euros of government and other bonds. They have become more active in bank supervision – a function now also centralised for the euro zone in the ECB. Moreover, a much broader toolkit than used in past decades is being energetically employed. Having tested the limits of their mandates, the ECB and other European Central Banks are now unlikely to return to the light touch policy of the 1990s. However, some puzzles remain: Why is inflation in the euro area – the main statutory objective of the ECB – still below target? Why were these tools not employed earlier in the crisis? Is there more that could be done now, such as helicopter money ; and if so, should it be used? This lecture will explain how the crisis has gradually drawn the ECB into policy areas and instruments for which its mandate is less explicit, though no less real. The Frankfurt-based Bank has, in the past ten years, changed more than most central banks. Like other major central banks, it has had to innovate in response to developments in globalization, in commodity price fluctuations and in unusually large fiscal deviations. But in doing so the ECB has been faced with unique challenges of political legitimacy as well as of economic analysis in the multi-country currency union.


Location:
Conference Room - Villa La Fonte

Affiliation:
Robert Schuman Centre for Advanced Studies

Type:
Lecture

Contact:
Florence School of Banking and Finance - Send a mail

Organiser:
Florence School of Banking and Finance

Speaker:
Patrick Honohan

Links:
For more information about the lecture

Similar events

 

Page last updated on 18 August 2017