New Paradigms in Central Banking?
This paper reviews whether and how the ongoing financial crisis has influenced central banking policy practice. Taking a historical perspective, it argues that throughout the existence of central banks the main objective has remained the same¯stability. What has been evolving over time, and has been influenced by the crisis, is our understanding about how to achieve and maintain stability over time. The paper focuses on the role and relative importance of price stability, economic stability and financial stability arguing that while the crisis has not materially shifted views regarding the monetary policy framework, it has highlighted the need for greater emphasis on financial stability than was appreciated before the crisis. It further argues that central banks must not only have a strong role in macro-prudential supervision but have more direct involvement in micro-supervision of the banking sector. Lastly, the paper argues that the crisis has reaffirmed that strong economic governance is a prerequisite for stability in a monetary union and, in the context of the euro area sovereign crisis, discusses the tremendous costs stemming from of lack of sufficient progress regarding economic governance going forward.
(This abstract was borrowed from another version of this item.)
|This chapter was published in: ||This item is provided by SUERF - The European Money and Finance Forum in its series Chapters in SUERF Studies with number
68-2.||Handle:|| RePEc:erf:erfssc:68-2||Contact details of provider:|| Postal: SUERF c/o OeNB, Otto-Wagner-Platz 3, A-1090 Vienna, Austria|
Phone: +43/1/404 20 7216
Fax: +43/1/404 20 7298
Web page: http://www.suerf.org
More information through EDIRC
|Order Information:|| Postal: SUERF c/o OeNB, Otto-Wagner-Platz 3, A-1090 Vienna, Austria|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Athanasios Orphanides & John C. Williams, 2002.
"Robust Monetary Policy Rules with Unknown Natural Rates,"
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 33(2), pages 63-146.
- Athanasios Orphanides & John C. Williams, 2002. "Robust monetary policy rules with unknown natural rates," Working Paper Series 2003-01, Federal Reserve Bank of San Francisco.
- Athanasios Orphanides & John C. Williams, 2003. "Robust monetary policy rules with unknown natural rates," Finance and Economics Discussion Series 2003-11, Board of Governors of the Federal Reserve System (U.S.).
- Athanasios Orphanides & John C. Williams, 2012. "Monetary Policy Mistakes and the Evolution of Inflation Expectations," NBER Chapters,in: The Great Inflation: The Rebirth of Modern Central Banking, pages 255-288 National Bureau of Economic Research, Inc.
- Athanasios Orphanides & John C. Williams, 2010. "Monetary policy mistakes and the evolution of inflation expectations," Working Paper Series 2010-12, Federal Reserve Bank of San Francisco.
- Athanasios Orphanides & John Williams, 2011. "Monetary Policy Mistakes and the Evolution of Inflation Expectations," NBER Working Papers 17080, National Bureau of Economic Research, Inc.
- Athanasios Orphanides & John C. Williams, 2010. "Monetary Policy Mistakes and the Evolution of Inflation Expectations," Working Papers 2010-2, Central Bank of Cyprus.
- Orphanides, Athanasios & Williams, John C, 2010. "Monetary Policy Mistakes and the Evolution of Inflation Expectations," CEPR Discussion Papers 7892, C.E.P.R. Discussion Papers.
- van Riet, Ad, 2010. "Euro area fiscal policies and the crisis," Occasional Paper Series 109, European Central Bank. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:erf:erfssc:68-2. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dragana Popovic)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.