Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/209991 
Year of Publication: 
2011
Series/Report no.: 
Working Paper No. 2011/15
Publisher: 
Norges Bank, Oslo
Abstract: 
The ongoing financial crisis is shaking central bankers' certainties about their mission, and a rethinking of such mission can greatly benefit from a non-finalistic reassessment of how central banking has evolved over the centuries. This paper does so by taking a functional, instead of an institutional approach. The survey covers the provision of both microeconomic (financial stability) and macroeconomic (monetary stability) central banking functions in the West since the Middle Ages. The existence of a number of important trends (some unidirectional, some cyclical) is underlined. The findings have implications for the current debate on the institutional design of central banking, both in the U.S. and in the eurozone. Historical evidence suggests that neither changes in the organizational model of central banks nor government deficit monetization should necessarily be seen as evil; what is crucial to the success of any solution, is that the institutional agreement backing the existence of money-issuing organizations must be credible. The appendix provides a case study on Norway.
Subjects: 
central banking
monetary policy
financial stability
institutional design
JEL: 
E42
E50
G21
N10
N20
Persistent Identifier of the first edition: 
ISBN: 
978-82-7553-625-7
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper
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