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 Research Projects at the MPIfG

Governing Financialization: Central Bank Power and Institutional Change

Leon Wansleben


 
Central banks have gained enormous economic policy influence since the 1970s. How is this ascendency related to the massive expansion of finance that has occurred during the same time span? A key intuition of the project is that we can answer this question by studying how central banks interact with the financial sector in concrete operative ways. Central banks depend on finance to leverage their policy interventions; likewise, finance depends on central banks for stabilizing the production of credit. These operative central bank-financial sector relations can take different forms. For instance, successful monetarist central banks like the Bundesbank gained authority through tight control over money markets and by maintaining a disciplining role vis-à-vis corporatist institutions. But the general trend in Western capitalist democracies has been towards central banks adjusting their modes of intervention to capitalize on and strengthen market-based finance. This policy change has been critical for the general ascendency of central banks in a time of liberalization and has created conditions for accelerated financial growth. Project duration: January 2019 to July 2021.
 

 
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