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#ECB Sabine Lautenschläger giving a powerful account of the central banker view of the world #nextgencentralbanking but also claiming that PEPP is not monetary financing. She makes two arguments, which you will not be surprised I both find unconvincing! 👇
The first argument is that there is market discipline because member states need to pay interest rates on debt that the ECB buys and need to have sufficient ratings. However, interest is mostly paid back to MS as NCB dividend and Greece is included despite rating requirement.
Her second argument is that the objective is not to fund governments but rather price stability. However, (1) there is no contradiction: the objective of facilitating government spending is now itself a means to achieving price stability also (2) who knows! 
Interesting debate between @BJMbraun
and @mh0rvath now live at #nextgencentralbanking conference. Issues of institutional amnesia, strategic ignorance and democratic control of central banks by
@BJMbraun, whose paper is here: transformative-responses.org/the-project/ne…
and @mh0rvath now live at #nextgencentralbanking conference. Issues of institutional amnesia, strategic ignorance and democratic control of central banks by
@BJMbraun, whose paper is here: transformative-responses.org/the-project/ne…
@mh0rvath responds by arguing that the fact that central banks actions have wider effects is often benign or even positive. Moreover, there is nothing progressive in dismantling CBI (mentioning Hungary as an example)
@mh0rvath's argument that central banks evolved into focusing on price stability because "that is what they are good at doing" is a very simplified view on the various conflicts related to the historical emergence of CBI and the price stability mandate (tbf he only had 5 minutes)
chief economist of the Slovakian central bank in conversation with @BJMbraun:
'there is nothing progressive about dismantling central bank independence and subjecting it to the will of the people' #nextgencentralbanking
'there is nothing progressive about dismantling central bank independence and subjecting it to the will of the people' #nextgencentralbanking
reminded me of famous Mervyn King quote:
'central banks are often accused of being obsessed with inflation. This is untrue. If they are obsessed with anything, it is with fiscal policy'
'central banks are often accused of being obsessed with inflation. This is untrue. If they are obsessed with anything, it is with fiscal policy'
Luis Garicano (EP): if @Isabel_Schnabel arguments wins the day and @ecb corrects market mispricing of climate risk, what next?
should ECB correct housing market imperfections? social/poverty imperfections?
should ECB correct housing market imperfections? social/poverty imperfections?
