Bernhard Bartels, Barry Eichengreen, Julian Schumacher, Beatrice Weder di Mauro
The fiscal dominance view holds that politically captured central banks are more likely to be pushed into taking risky positions, while independent ones resist. This column presents new estimates of the value at risk in the balance sheets of 18 advanced economies’ central banks over two decades which suggest the opposite: more independent central banks take more financial risk, and they do so most aggressively when fiscal policy tightens. Independence, it seems, frees central banks to deploy their balance sheets in pursuit of their mandates, whatever the cost to profits.
Πηγή: Voxeu