Financial Stability – Prerequisite For The Proper Financing Of The Real Economy

The interventions done by central banks in order either to provide liquidity or to help the recovery of economic growth, during the lasting effects of the recent financial crisis, have again brought into the light the question how the monetary policy is serving the best a sustainable growth. Beyond the fact that in Europe, especially within the European System of Central Banks (ESCB), we still stack on the independent mandate of price stability connected with that of the financial stability, there still exists the propensity to think in a different way the contribution of a central bank to the stated issue through its monetary policy conduct. I think that we cannot compare National Bank of Romania`s mandate with those of FED or other central banks issuing international reserve currency, but we also cannot totally neglect that between the monetary policy effects and the economic growth there is a link. The difference is that many believe that this has to be on purpose, e.g. the central banks instruments are ex ante calibrated for economic growth, while a correct approach is that the monetary policy conduct responding primarily to price stability is creating ex post the potential for a sustainable growth. Accepting that, we can start from financial stability to explain better how the monetary policy has a role in economic growth by not diluting the mandate and the independence of the central bank.