Description
Book SynopsisOver the past decade central banks have taken on new and expanded roles in an attempt to manage the global financial crisis. The European Central Bank (ECB) has been no exception. If anything, because of the incomplete architecture of the euro, the ECB has faced more serious challenges than either the Bank of England or the Federal Reserve. With the onset of the euro crisis, the ECB was forced to take on powers that went well beyond the conventions of standard monetary policy to prevent European Monetary Union from unravelling.
Panicos Demetriades, former Governor of the Central Bank of Cyprus during the country's bailout in 2013, examines the role of the ECB and its adoption of these new powers, which have led to legal and political challenges, high level resignations and the controversial removal of central bankers from their posts without due process. Demetriades argues that at a time when stability and action are needed to secure the future of the euro, the very foundations of the Euro-system are being eroded, namely its ability to act independently. The book provides a lively and insightful account of the processes that can make or break the euro.
Trade ReviewDrawing on his extraordinary professional experience, Demetriades discusses the value and curse of central banking. While the author argues in favour of central bank independence, he does not fail to address the challenge to central banks' legitimacy resulting from the latest period of crisis management. This book offers a comprehensive analysis of what might appear an irreconcilable duality in central banking between independence and legitimacy. -- Filippo Taddei, former Economic and Labour Affairs Spokesperson of the Italian Democratic Party and Economic Advisor to the Italian Prime Minister
An important and timely contribution to the topic of central bank independence in Europe’s monetary union. Based on his experience as an economist and as a former central bank governor, Demetriades presents the academic arguments for independence, the limits of the Euro-system’s framework for governance, and the necessary next steps to make sure the mistakes of the financial crisis are not repeated. -- Claire Jones, Global Economy Reporter, Financial Times
Table of Contents1. Central bank roles: historical context2. Central bank independence in Europe: origins, scope and limits3. Crisis management and legitimacy4. The ECB’s policies during the crisis5. Whatever it takes6. Banking union7. Small countries and why they matter8. Political money laundering9. Can the erosion of central bank independence be reversed?
