Central banking in need of new targets and goals: The case of the European Central Bank

The objective of this paper is to assess the implications of the global financial crisis for the tasks of central banks in the future, using European Central Bank as a case study and comparing its stance with that of other central banks of the major economies (The Federal Reserve of the United States, Bank of England and Bank of Japan). The aspects compared will include the mandate, independence, accountability and transparency.

After presenting the historical changes in central banking, focusing on the monetary policy process, the paper will analyze the standard and non-standard measures adopted in the crisis context and the reversal of the pre-2007 trends – as regards the lending operations, outright purchases, bail-outs and capital injections.

Inferences will be drawn using reports of Expert Meetings at the ECB, interviews and speeches of the members of the Executive Board of the ECB, recent documents delivered by the Fed, Bank of England and Bank of Japan, exit strategies and staff papers of the leading financial organizations.

The paper concludes with asserting that central bankers will get larger supervisory powers and they could not remain the same apolitical technocrats pulling the single lever of prices stability, but financial stability as well.