Category: Central Bank

Central Banks Independence from Government Empirical evidence indicates that greater central bank independence, freedom from direct political or governmental influence (Walsh, 2005: 21), is associated with lower inflation (Fischer, 1995). Although difficult to quantify, Fischer estimates that an increase in the inflation rate from 0 to 10% could cost 2-3% of GNP (Fischer, 1981: 23).…

The Bank of England and Its Role in Ensuring the Financial Stability of the UK The Bank of England is the prestigious and incredibly old central bank for the United Kingdom. The country founded this model central bank in 1694 to promote the good of the individuals in the U.K. through maintaining both monetary as…

Central Banks and Political Retaliation The emergence of many central banks in the world has been linked to the desire of kings to seek additional funding in the face of increased spending on the state apparatus and wars against other countries. The ability of central banks to create cash independently of their precious metal reserves…

The Freedom of the European Central Bank The solicitation from Germany’s protected court to suspend acquisition of German bonds by the Bundesbank will prompt a very long time of legitimate and political battle that will genuinely debilitate the exertion by Europe to battle the coronavirus emergency. It likewise opens up another time of analysis of…

Walter Bagehot’s Theory: The Essential Guide to Central Banking The great number of modern theories explaining the role of central bank in each country were established based on British journalists Walter Bagehots paper (1873), where he explains the workings of banking system of his time. In first chapter of the book writer points out the…