Thread by @PRoufos

Interesting debate between @BJMbraun
and @mh0rvath now live at #nextgencentralbanking conference. Issues of institutional amnesia, strategic ignorance and democratic control of central banks by
@BJMbraun, whose paper is here: transformative-responses.org/the-project/ne…

@mh0rvath responds by arguing that the fact that central banks actions have wider effects is often benign or even positive. Moreover, there is nothing progressive in dismantling CBI (mentioning Hungary as an example)

@mh0rvath's argument that central banks evolved into focusing on price stability because "that is what they are good at doing" is a very simplified view on the various conflicts related to the historical emergence of CBI and the price stability mandate (tbf he only had 5 minutes)

Ok, this was literally a "speed debate". It's over now, moving on to @jvtklooster and Luis Garicano. #nextgencentralbanking

@jvtklooster paper here: transformative-responses.org/wp-content/upl…

@jvtklooster elaborates on the 'authorsation gaps' in relation to the ECB's scope of activities due to its unclear and 'drafter more than 30 years ago' mandate. EU Council and Parliament should be more active in interpreting the treaties.

@lugaricano agrees that the current mandate is "not really adequate" for dealing with issues like climate and other unconventional policies. But points out that Treaty changes are "traumatic experiences" for the EU Parliament. @ECB overall mandate can be adapted for PEPP but ...

>> if the ECB mandate is adapted to deal with climate change, where does this stop? Why not housing too? Or pensions? ECB mandate is like a contract, the central bank is given an objective and follows it. If these objectives are constantly changing, CBI is undermined.

This argument however doesn't take into account what @BJMbraun called "strategic ignorance", i.e. the notion the central banks are *already* (and have been historically too) intervening in areas beyond "price stability". The "objective" is not as clear as @lugaricano claimed

@jvtklooster adopts @lugaricano's metaphor of treating CBI as a car journey from Barcelona to Madrid, a journey with a clear objective (price stability) that cannot be made if there is constant interference, also agreeing that a legislative change is probably the best way forward

@lugaricano "in a world where the @ECB is so powerful, political accountability is absolutely crucial."

Final word from @jvtklooster: talk of "authorisation gaps" is not meant to imply that programmes like #PEPP should not be allowed. The idea is to acknowledge that there is a gap and to seriously think about who gets to do the interpretation: the Courts or Parliament?

Julia Király now giving an absolutely fascinating exposition of the enhanced role and (occasionally irrational) activities of the Hungarian central bank under the Orban regime.

Király: looking at how Orban has expanded the role of the central bank means the bank has actually lost its transparency. The argument is reminiscent of what @adam_tooze talked about on the first day of #nextgencentralbanking: mandate change yes but in which direction?