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Should central banks' mandate be revised?

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  • Stournaras, Yannis

Abstract

This paper revisits the evolving mandates of central banks in light of recent economic disruptions and structural shifts. Drawing on historical lessons from the Great Inflation and the Global Financial Crisis, it highlights the importance of price stability and central bank independence as foundational principles. The analysis focuses on the European Central Bank's (ECB) updated monetary policy strategy, emphasizing its mediumterm orientation, symmetric inflation target, and enhanced responsiveness to uncertainty. The paper also explores the broader role of central banks in supporting financial stability and addressing emerging challenges such as climate risk, digitalization, and geopolitical fragmentation. It argues that while central banks must remain anchored in their primary objective of price stability, their mandates should adapt to reinforce resilience and support sustainable growth. The conclusion calls for deeper institutional integration in the euro area to amplify the effectiveness of monetary policy and strengthen the international role of the euro.

Suggested Citation

  • Stournaras, Yannis, 2025. "Should central banks' mandate be revised?," Working Papers 1, National and Kapodistrian University of Athens, Department of Economics, International Economics and Development Laboratory (IEDL).
    • Handle: RePEc:zbw:iedlwp:336684
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    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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