Central Banks: A Global Perspective Chapter 13 Central Banks: A Global Perspective

The Price Stability Goal And The Nominal Anchor(名目定位) Low and stable inflation Inflation Creates uncertainty(不確定性) and difficulty in planning for the future (難以計畫未來) Lowers economic growth Strains social fabric (扭曲社會架構) Nominal anchor to contain inflation expectations(名目定位會包含通膨預期) The Time-inconsistency problem(時間不一致問題) 2

Other Goals of Monetary Policy High employment(高就業) Economic growth(經濟成長) Stability of financial markets(金融市場穩定) Interest-rate stability(利率穩定) Stability in foreign exchange market(外匯市場穩定) 3

Should Price Stability be the Primary Goal ?(價格穩定最重要嗎？ ) In the long run there is no inconsistency between the goals(長期來說這些目標並不衝突) In the short run it can conflict with the goals of high employment and interest-rate stability(短期來說高就業、 利率穩定與價格穩定相衝突) Hierarchical mandate(高層命令) Dual mandate(雙元命令) 在馬斯垂克條約中，歐洲央行的最重要任務是維繫物價穩定 4

Origins of the Federal Reserve System Resistance to establishment of a central bank Fear of centralized power (害怕中央集權) Distrust of moneyed interests (不信任有錢人的利益) No lender of last resort(無最後貸款者) Nationwide bank panics on a regular basis Panic of 1907 so severe that the public was convinced a central bank was needed Federal Reserve Act of 1913 Elaborate system of checks and balances(精心設計的查核與平衡系統) Decentralized(分權)

Structure of The Federal Reserve System(聯準會架構) The writers of the Federal Reserve Act wanted to diffuse power along regional lines Federal Reserve System include the following entities The 12 Federal Reserve banks (聯邦準備銀行) The Board of Governors of the Federal Reserve System (聯邦準備理事會) The Federal Open Market Committee (FOMC) (聯邦公開市場操作委員會) The Federal Advisory Council (聯邦諮詢委員會) Around 2,900 member commercial banks(會員銀行) 6

FIGURE 2 Federal Reserve System Source: Federal Reserve Bulletin.

Federal Reserve Banks Quasi-public institution(準公營機構) owned by private commercial banks in the district that are members of the Fed system Member banks elect six directors for each district; three more are appointed by the Board of Governors Together, these nine directors appoint the president of the bank subject to approval by Board of Governors 8

Functions of the Federal Reserve Banks Clear checks (支票清算) Issue new currency (發行通貨) Withdraw damaged currency from circulation (回收損毀的通貨) Administer and make discount loans (管理與執行貼現放款) to banks in their districts Evaluate proposed mergers and applications for banks to expand their activities (評估合併案與銀行申請擴充業務) 9

Member Banks All national banks (國家銀行) are required to be members of the Federal Reserve System Commercial banks chartered by states(州立銀行) are not required but may choose to be members Depository Institutions Deregulation and Monetary Control Act of 1980 subjected all banks to the same reserve requirements as member banks and gave all banks access to Federal Reserve facilities(聯邦準備銀行設施)(註：1980之前是不平等的) 10

Board of Governors of the Federal Reserve System Seven members (7位理事) headquartered in Washington, D.C. Appointed by the president and confirmed by the Senate (總統任命，參議院副署) 14-year non-renewable term (14年任期不得連任) Required to come from different districts Chairman is chosen from the governors and serves four-year term (理事主席由7位理事中挑選任期四年) 11

Federal Open Market Committee (FOMC) Meets eight times a year (每年集會7次) Consists of seven members of the Board of Governors, the president of the Federal Reserve Bank of New York and the presidents of four other Federal Reserve banks The chairman of the Board of Governors is also chair of FOMC Issues directives to the trading desk at the Federal Reserve Bank of New York (向紐約州聯邦準備銀行交易室下達指令) 12

How Independent(獨立性) is the Fed? Instrument and goal independence.(工具與目標獨立) Independent revenue(收入獨立) Fed’s structure is written by Congress(架構來自於國會), and is subject to change at any time. Presidential influence Influence on Congress Appoints members(任命理事) Appoints chairman(任命理事主席) although terms are not concurrent 13

Structure and Independence of The European Central Bank The ESCB(歐洲央行體系) encompasses the ECB(歐洲中央銀行)and the National Central Banks(歐盟各會員國的中央銀行)of the 27 EU member states The Eurosystem(歐元體系) comprises of the ECB and the NCBs of only the sixteen countries that have adopted the euro(採用歐元) The decision-making process at the EMU(歐洲貨幣同盟) takes place at three levels The Governing Council(管理委員會) , the Executive Board(執行理事會) and the General Council(一般委員會) 14

歐洲中央銀行體系的組織與運作 貨幣銀行學 Chapter 10 中央銀行的組織與運作

Governing Council Executive Board and General Council The supreme decision-making(最高決策) body of the ECB, comprises the six members of the Executive Board(6位執行董事), plus the governors(總裁) of the National Central Banks of the 16 Euro area nations Formulate the monetary policy for the Euro area Executive Board (執行理事會) President, vice-president and four other members Ensure the day-to-day implementation of the monetary lines of the Governing Council 16

管理委員會 「管理委員會」由23名委員組合而成，其中6位係「執行理事會」理事，17位係歐元區會員國央行的總裁 。 「執行理事會」理事任期8年，不得連任；各NCBs總裁任期至少5年(目前為5~8年) 。 理事必須由貨幣及銀行領域享有聲譽及專業經驗之人士擔任。 貨幣銀行學 Chapter 10 中央銀行的組織與運作

Governing Council Executive Board and General Council The General Council (一般委員會) President, vice-president of the ECB, representatives of the 16 Euro area countries and the 11 non-Euro zone EU Member States. Performs advisory(諮詢) tasks to the ECB, collects statistical information and standardizes the accounting operations of the NCBs 18

歐洲中央銀行及會員國央行之職責 共同職責 ECB「專屬職責」 NCBs「專屬職責」 貨幣銀行學 Chapter 10 中央銀行的組織與運作 1.執行貨幣政策操作 2.發行鈔券 3.執行對公共機關之操作 4.執行對第三國之操作 5.收集統計資料 1.制定貨幣政策 2.確立ESCB的法規與架構 3.授權鈔券發行 4.制定及發布法規 5.決定ESCB對外代表 6.準備及說明ESCB年報 7.實施單一貨幣政策 1.各國外匯資產操作 2.參與金融機構之監理 3.代理國庫 4.參與國際組織 5.跨國合作 貨幣銀行學 Chapter 10 中央銀行的組織與運作

How Do National Central Banks Operate Within the Eurosystem Play an essential role in the ESCB Exercise powers delegated(代表) by the Governing Council Deutsche Bundesbank(德意志聯邦銀行) Till 2008 Bundesbank had nine regional offices and 47 branches throughout Germany 20

How does the ECB differ from the Bundesbank? Implements the Eurosystem monetary policy as laid down in the EC Treaty(歐盟條約) Clears house for its member banks and the banker’s banker The Bundesbank is the state’s banker and Federal Government’s fiscal agent(各州銀行家及聯邦政府財政代理人) Manages the currency reserves(通貨準備) of Germany Cooperates with other international institutions 21

How Independent is the ECB? Most independent in the world Members of the Executive Board have long terms(8 years) Determines own budget Less goal independent Price stability(消費者物價年增率低於2%) Charter cannot by changed by legislation; only by revision of the Maastricht Treaty(馬斯垂克條約) 22

Central Banks Round The World Bank of Canada Essentially controls monetary policy Bank of England Has some instrument independence Bank of Japan Recently (1998) gained more independence Central Banks in Transition Economies Czech, Bulgarian and Hungarian central banks 23

Central Banks in Developing Countries and Emerging Economies The degree of independence of their central banks highly relates to the level of development of the financial sector and political institutions One main barrier is the low level of capitalization and their inability to generate sources of revenue. 24

Central Banks in Developing Countries and Emerging Economies People’s Bank of China Multinational Central Banks in Developing countries Central Bank Reforms in South America Currency Unions in Developing Nations The Trend Toward Greater Independence 25

Explaining Central Bank Behavior Theory of bureaucratic behavior: objective is to maximize its own welfare which is related to power and prestige Fight vigorously to preserve autonomy(保有自主權) Avoid conflict with more powerful groups(避免與有權團體發生爭端) Does not rule out altruism(利他主義) 26

Case for Independence Political pressure would impart an inflationary bias to monetary policy Political business cycle Could be used to facilitate Treasury financing of large budget deficits(有助於財政融資大量赤字): accommodation Too important to leave to politicians(太重要而不能交給政客)—the principal-agent problem is worse for politicians 27

Case Against Independence Undemocratic(不民主) Unaccountable Difficult to coordinate fiscal and monetary policy(財政政策與貨幣政策難配合) Has not used its independence successfully(獨立性從未成功過) 30