Director and CEO, German Council on Foreign Relations
Senior fellow (on leave for public service)
Professor, Princeton University,
Vice-President, Deutsche Bundesbank,
Emeritus Professor, London School of Economics,
Deputy Governor, National Bank of Sweden,
Member of the Monetary Policy Council, National Bank of Poland,
Old theories in monetary policy are being challenged and macroprudential policy is ever more important. This two-session workshop addressed the place of central banks in the post-crisis economy.
Session 1: Macroprudential policy and its relationship with monetary policy: the complex European framework
Macroprudential policy has two main goals: to increase the resilience of the financial system and to tame the financial cycle with more targeted tools than monetary policy. These measure can be tailored to country-specific circumstances, which is especially important in a heterogeneous monetary union. However, macroprudential policies are new and still under construction, especially in advanced economies. Are macroprudential tools sufficient to ensure financial stability? Could the complex European set-up make their implementation less effective?
Session 2: After the crisis, the evolving role of central banks
Do we have to re-open the institutional design question we had thought we had solved establishing independent central bank moving interest rates in the pursuit of price stability? Do new monetary tools, a closer relationship with fiscal policy and the renewed financial stability mandate require a new central banking paradigm?