Central bank independence – in need of further thinking
· Andrew Bailey, Governor of the Bank of England (United Kingdom)
Summary written by Dark Majestic in its own words · topics: inflation and price stability, financial stability
AB · Andrew Bailey Wiki · Bank of England WikiCentral bank independence – in need of further thinkingContextSpeech by the Governor of the Bank of England at Columbia University in New York.
Why it mattersArgues that the case for central bank independence is incomplete and must be rethought as political pressure on central banks grows.
Problems raised- Central bank independence is incomplete and more challenged.
- Governments may be tempted to create extra inflation.
- Non-banks can trigger liquidity crises.
Solutions proposed- Rethink the foundations of independence.
- Keep a clear line between banks and non-banks.
- Design financial stability tools to handle liquidity stress.
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