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0:00
Hi everyone, welcome to
this Henry Stewart talk on
the evolution of central banking
since the global
financial crisis.
My name's Lewis Jackson
and I'm an analyst and
writer on economic policy and
central banks in particular.
0:14
Today we're going to
be talking about the
transmission of
central banking from
before the global financial
crisis up until today,
and the story here is one
of expanding mandates,
expanding tools, and
really a general widening
in the role that central banks
play in society and the economy.
On one level, we're going to
explore this transformation
through specific policies and
technical decisions
that were made.
But another level
we're going to look at
the implications, political
and economic, as of
central banks taking on this
broader role and how it's
changed their relationship to
both society and government,
and we will look at these
changes over four periods,
starting with the
consensus that prevailed
before the crisis
began up until today
with the COVID-19 crisis.
1:03
Start quickly by going
through what is a central bank
and its major responsibilities.
I think it's really
important that we
start always remembering
that central banks are
ultimately arms of the state
historically instituted
to finance wars.
Their roles have
evolved since then.
There's one element of politics
that we need to keep in mind.
Traditionally
operationally is for banks
have had two broad roles,
although they can tend
to look a little bit
different in different places
and at different times.
One of these is monetary policy.
Overseeing the
nation's money supply,
maintaining price stability
in the value of the currency.
The other is financial policy,
maintaining the stability
of the financial system,
that payment system through
which the money
supply circulates.
At different points in history,
central banks being governed
differently and historically,
in the 17th and 18th century,
central banks actually were
private institutions throughout
much of the 20th century,
there were nationalized
and run really under
the direction of treasure
departments, and today,
across most of the
developed world,
central banks are
operationally independent.
So, they have a mandate
set by the government,
but on a day-to-day basis,
they get to choose how
they will conduct policy
to achieve that mandate.
We're going to be talking today
about how monetary policy,
financial policy evolved,
and you'll see at the bottom of
the slides two little
icons just to keep track
of as we talk about different
aspects of central banking.
