Central Banks at a Crossroads - What Can We Learn from History?

Throughout their long history, the primary concern of central banks has oscillated between price stability in normal times and financial stability in extraordinary times. In the wake of the recent global financial crisis, central banks have been given additional responsibilities to ensure financial stability, which has sparked intense debate over the nature of their role. Bankers and policy makers face an enormous challenge finding the right balance of power between the central bank and the state. This volume is the result of an international conference held at Norges Bank (the central bank of Norway). International experts and policy makers present research and historical analysis on the evolution of the central bank. They specifically focus on four key aspects: its role as an institution, the part it plays within the international monetary system, how to delineate and limit its functions, and how to apply the lessons of the past two centuries. A broad overview of the evolution of central banks and central banking with an emphasis on the lessons waiting to be learnt Identifies recent trends in the development of central banks and central banking in the aftermath of the recent financial crisis Provides valuable historical background to the current debate about the role of the central bank

Preface Michael D. Bordo, Øyvind Eitrheim, Marc Flandreau and Jan F. Qvigstad 1. Introduction Michael D. Bordo, Øyvind Eitrheim, Marc Flandreau and Jan F. Qvigstad 2. The descent of central banks (1400–1815) William Roberds and François R. Velde 3. Central bank credibility - an historical and quantitative exploration Michael D. Bordo and Pierre L. Siklos 4. The coevolution of money markets and monetary policy, 1815–2008 Clemens Jobst and Stefano Ugolini 5. Central bank independence in small open economies Forrest Capie, Geoffrey Wood and Juan Castañeda 6. Fighting the last war - economists on the lender of last resort Richard S. Grossman and Hugh Rockoff 7. A century and a half of central banks, international reserves and international currencies Barry Eichengreen and Marc Flandreau 8. Central banks and the stability of the international monetary regime Catherine Schenk and Tobias Straumann 9. The international monetary and financial system - a capital account historical perspective Claudio Borio, Harold James and Hyun Song Shin 10. Central banking - perspectives from emerging economies Menzie D. Chinn 11. The evolution of the financial stability mandate from its origins to the present day Gianni Toniolo and Eugene N. White 12. Bubbles and central banks - historical perspectives Markus K. Brunnermeier and Isabel Schnabel 13. Central banks and payment systems - the evolving trade-off between cost and risk Charles Kahn, Stephen Quinn and Will Roberds 14. Central bank evolution - lessons learnt from the sub-prime crisis C. A. E. Goodhart 15. The evolution of central banks - a practitioner's perspective Andrew G. Haldane and Jan F. Qvigstad Index.