Central Banking Without Central Bank Money

1999 ◽  
Author(s):  
Timo Henckel ◽  
Alain Ize ◽  
Arto Kovanen
Keyword(s):  
Central Bank ◽  
Central Banking ◽  
Central Bank Money ◽  
Bank Money

Central Banking without Central Bank Money

1999 ◽  
Vol 99 (92) ◽  
pp. 1 ◽  
Author(s):  
Alain Ize ◽  
Arto Kovanen ◽  
Timo Henckel ◽  
◽  
◽  
...  
Keyword(s):  
Central Bank ◽  
Central Banking ◽  
Central Bank Money ◽  
Bank Money

Issuing Financial Money of Ultimate Quality

2019 ◽  
pp. 30-82
Author(s):  
Ulrich Bindseil
Keyword(s):  
Central Bank ◽  
Large Scale ◽  
Central Banks ◽  
Central Banking ◽  
Theory And Practice ◽  
Financial Assets ◽  
Central Bank Money ◽  
Bank Money

The essence of central banking is the issuance of central bank money—being itself defined as dominant financial money used at a large scale for payments and being of the highest possible credit and liquidity quality amongst all financial assets, such that payment through it is accepted as settlement of any other financial claim. This chapter elaborates on the nature of central bank money and reviews the pre-1800 theory and practice of central bank money issuance. It is shown that the nature of central bank money and its benefits were well understood by early authors. Moreover, the 25 central banks that issued (or at least aimed at) issuing central bank money before 1800 are introduced. The types of central bank money (deposits, banknotes, certificates of deposits) are briefly reviewed.

Lender of Last Resort

2019 ◽  
pp. 136-154
Author(s):  
Ulrich Bindseil
Keyword(s):  
Central Bank ◽  
Financial Stability ◽  
Debt Crisis ◽  
Central Banks ◽  
Central Banking ◽  
Lender Of Last Resort ◽  
Central Bank Money ◽  
Bank Of England ◽  
European Debt Crisis ◽  
Bank Money

The recent central banking literature often argues that the LOLR function would be the key feature defining a ‘modern’ central bank. This chapter argues that this view may appear too radical (despite the enormous benefits of the LOLR) as the appearance of the LOLR does not change the nature of central banking (which is primarily associated with the issuance of central bank money). After providing an overview of the roles of central banks for financial stability, the chapter focuses on one early LOLR episode, namely the measures of the Hamburger Bank, Bank of Amsterdam and Bank of England in the European debt crisis of 1763. It is shown that in particular the Hamburger Bank acted as systemic lender of last resort, comparable to what modern central banks did in 2008.

Central Banking before 1800

2019 ◽  
Author(s):  
Ulrich Bindseil
Keyword(s):  
Central Bank ◽  
Central Banks ◽  
Central Banking ◽  
Natural Monopoly ◽  
European Continent ◽  
Central Bank Money ◽  
As Species ◽  
Policy Objectives ◽  
The 19Th Century ◽  
Bank Money

During the 20th century, a view established itself, according to which (a) defining central banking would be difficult, (b) the Sveriges Riksbank (established in 1668) and the Bank of England (established in 1694) would have been the first central banks, (c) although at that time central banks did not have a policy mandate and no concept of central banking would have existed before the 19th century. This book challenges these views and rehabilitates pre-1800 central banking, including the role of numerous other institutions, mainly on the European continent. Central banking should be defined as being associated with the issuance of “central bank money”, i.e. financial money of the highest possible credit quality, that is accepted for settlement of any other financial claim in the same way as species money is accepted as it is considered credit, liquidity and market risk free, to use modern terminology. Issuing central bank money is a natural monopoly, and therefore central banks were always based on public charters regulating them and giving them a unique role in a sovereign territorial entity. Many early central banks were not only based on a public charter but were also publicly owned and managed, and had well defined policy objectives. The book reviews these policy objectives and the financial operations of 25 central banks established before 1800. The book shows that many of the central bank controversies debated today actually date back to the period 1400-1800.

scholarly journals Rethinking Monetary Sovereignty: The Global Credit Money System and the State

2020 ◽  
Author(s):  
Jens van 't Klooster ◽  
Steffen Murau
Keyword(s):  
Economic Policy ◽  
Central Bank ◽  
Crucial Role ◽  
The State ◽  
Financial Globalization ◽  
Shadow Banks ◽  
Monetary System ◽  
Central Bank Money ◽  
Policy Objectives ◽  
Bank Money

This article proposes a conception of monetary sovereignty that recognizes the reality of today’s global credit money system. Monetary sovereignty is typically used in a Westphalian sense to denote the ability of states to issue and regulate their own currency. This article rejects the Westphalian conception. Instead, it proposes a conception of effective monetary sovereignty that focuses attention on what states are actually able to do in the era of financial globalization. The conception fits the hybridity of the modern credit money system by acknowledging the crucial role not only of central bank money but also of money issued by regulated banks and unregulated shadow banks. These institutions often operate ‘offshore’, outside of a state’s legal jurisdiction, which makes monetary governance more difficult. Monetary sovereignty consists in the ability of states to effectively govern these different segments of the monetary system and thereby achieve their economic policy objectives.

scholarly journals Economic Accounts and Financial Systems

2021 ◽  
pp. 1-9
Author(s):  
Ulrich Bindseil ◽  
Alessio Fotia
Keyword(s):  
Central Bank ◽  
Balance Sheet ◽  
Central Banking ◽  
Lender Of Last Resort ◽  
Financial Systems ◽  
Financial Flows ◽  
Balance Sheets ◽  
The Government ◽  
Real Assets ◽  
Bank Money

AbstractThis chapter introduces the system of accounts of the main sectors of the economy (households; non-financial corporations, the government; banks, and the central bank), describing how these sectors are interrelated through financial claims and liabilities. A financial system, consisting of commercial banks and the central bank, manages flows of funds originating from households, without these flows causing a need for the real sectors to liquidate illiquid real assets. The basic types of assets and liabilities are: real goods, gold, banknotes, deposits, bonds, loans, and equity. We explain how the shortcomings of both IOU and commodity-money based financial systems can be solved via establishing a central bank. A central bank is defined here by its balance sheet and central bank money is the central bank’s basic liability. Both monetary policy implementation and lender of last resort issues relate to liquidity flows within balance sheets. Understanding the logic of basic financial flows is therefore the basis for understanding central banking.

scholarly journals The Bank of Amsterdam and the Leap to Central Bank Money

2007 ◽  
Vol 97 (2) ◽  
pp. 262-265 ◽  
Author(s):  
Stephen Quinn ◽  
William Roberds
Keyword(s):  
Central Bank ◽  
Central Bank Money ◽  
Bank Money
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