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The Act of 1973 on Banque de France’s independence: the myth of the end of advances

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  • BLANCHETON Bertrand

Abstract

A stubborn myth presents this Act as a conspiracy, allegedly giving the Banque de France solid independence and stymieing any subsequent allegiance to the Government. The State would have been forced to turn to the markets for financing, leading to an increase in the public debt. For the far left, the nationalist right-wing and also for M. Rocard or J Attali, this Act would mark a break in the financial relations between the bank and the government, blocking the possibility to mint money in order to finance public spending and obtain the Bank’s cooperation at zero cost. In reality, article 19 of the Act upholds the possibility for the Government to obtain advances and loans… The Act of 1973 very clearly protects the possibility for the Government to obtain finance from the Banque de France – even at no cost – and keeps it under strict guardianship

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  • BLANCHETON Bertrand, 2015. "The Act of 1973 on Banque de France’s independence: the myth of the end of advances," Cahiers du GREThA (2007-2019) 2015-03, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    • Handle: RePEc:grt:wpegrt:2015-03
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    References listed on IDEAS

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    1. Bertrand Blancheton, 2012. "The false balance sheets of the Bank of France and the origins of the Franc crisis, 1924--26," Accounting History Review, Taylor & Francis Journals, vol. 22(1), pages 1-22, March.
    2. Alesina, Alberto & Summers, Lawrence H, 1993. "Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 25(2), pages 151-162, May.
    3. Bertrand Blancheton, 2014. "L'autonomie de la Banque de France de la Grande Guerre à la loi du 4 août 1993," Revue d'économie financière, Association d'économie financière, vol. 0(1), pages 157-178.
    4. Bertrand Blancheton & Hubert Bonin & David Le Bris, 2014. "The French paradox: A financial crisis during the golden age of the 1960s," Business History, Taylor & Francis Journals, vol. 56(3), pages 391-413, April.
    5. Cukierman, Alex & Webb, Steven B & Neyapti, Bilin, 1992. "Measuring the Independence of Central Banks and Its Effect on Policy Outcomes," The World Bank Economic Review, World Bank, vol. 6(3), pages 353-398, September.
    6. Bertrand Blancheton, 2012. "The false balance sheets of the Bank of France and the origins of the Franc crisis, 1924-1926," Post-Print hal-00799148, HAL.
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    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative

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