Notes on Central Banking as Global Governance by Rodney Bruce Hall
Session 11: Global Banking
Central Banking as Global Governance. Constructing Financial Credibility * Functions of a Central Bank Monetary Policy | Creating Money | Maintain reserves and FOREX | Monetize Government Debt | Control Inflation | Lender of Last Resort | Creating Credit | Consumer Banking regulator | Exports- effect on Trading policy | Sectored Financing |
Creation of Credit or endogenous money into the economy is also done by the CB as it authorizes consumer banks and government debt monetization. Money is created by the ‘stroke of the key’ after an equivalent amount is floating in the economy.
Due to these broad responsibilities, the CB according to neo-liberal tendencies, should be independent by : * Credibility: Maintaining price stability, prevent moral hazard, penalize destructive habbits * Transparency: Future value of money by ensuring all actors know what indicators the CB uses to rate policies.
Credibility rests on promise fulfilment. Promises create expectations, which are trust. Hence, credit or money turns into a promise (a social thing)
All these functions and required action sets group together to form the ‘deontic’ powers of the CB.
Academic Evolution of Idea:
Money has historically only been seen through the commodity theory or the quantity theory variant
Money is a store of value or a medium of exchange according to these theories
Money is social because assets and liabilities, the two components of a double-entry system, are essentially promises to either ‘give money’ or ‘receive money’
This promise creates an obligation, a duty or a right for either party
Social Science is difficult to study because of the inter-subjectivity of the topics and observation. It reads power through the institutional facts of different actors (Ref. Searle)
Hence, there is scope for inter-subjective interpretation and constructive approach before rendering an Institute
Institute= constructed by collective intentionality
Central Banking as Global Governance. Constructing Financial Credibility * Functions of a Central Bank Monetary Policy | Creating Money | Maintain reserves and FOREX | Monetize Government Debt | Control Inflation | Lender of Last Resort | Creating Credit | Consumer Banking regulator | Exports- effect on Trading policy | Sectored Financing |
Creation of Credit or endogenous money into the economy is also done by the CB as it authorizes consumer banks and government debt monetization. Money is created by the ‘stroke of the key’ after an equivalent amount is floating in the economy.
Due to these broad responsibilities, the CB according to neo-liberal tendencies, should be independent by : * Credibility: Maintaining price stability, prevent moral hazard, penalize destructive habbits * Transparency: Future value of money by ensuring all actors know what indicators the CB uses to rate policies.
Credibility rests on promise fulfilment. Promises create expectations, which are trust. Hence, credit or money turns into a promise (a social thing)
All these functions and required action sets group together to form the ‘deontic’ powers of the CB.
Academic Evolution of Idea:
Money has historically only been seen through the commodity theory or the quantity theory variant
Money is a store of value or a medium of exchange according to these theories
Money is social because assets and liabilities, the two components of a double-entry system, are essentially promises to either ‘give money’ or ‘receive money’
This promise creates an obligation, a duty or a right for either party
Social Science is difficult to study because of the inter-subjectivity of the topics and observation. It reads power through the institutional facts of different actors (Ref. Searle)
Hence, there is scope for inter-subjective interpretation and constructive approach before rendering an Institute
Institute= constructed by collective intentionality