The ethics of central banking

Authored by: François Claveau , Peter Dietsch , Clément Fontan

The Routledge Handbook of Ethics and Public Policy

Print publication date:  November  2018
Online publication date:  October  2018

Print ISBN: 9781138201279
eBook ISBN: 9781315461731
Adobe ISBN:

10.4324/9781315461731-15

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Abstract

Central banks represent one of the key institutions of modern societies. The task of these institutions is to promote the common good. We provide three reasons to believe that, at least since the 2007 financial crisis, central banks do not live up to this task. First, their actions have serious unintended consequences, notably on economic inequalities. Second, while the independence of central banks from governments has been ensured, the leverage of financial markets on central banks has been neglected. Finally, the epistemic community of central bankers does not satisfy the conditions of an effective error-correction mechanism on monetary issues.

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