Panicos Demetriades's picture
Affiliation: 
University of Leicester
Credentials: 
Professor of financial economics
Former Governor, Central Bank of Cyprus and ECB Governing Council member

Voting history

A “new” UK industrial strategy ?

====================================================================

Question 1: Do you agree that the UK needs a new industrial policy?

====================================================================

Answer:
Agree
Confidence level:
Confident
Comment:
It needs an industrial strategy that addresses human capital deficiencies, such as skills mismatches in the labour market. The UK is, however, not lacking in strong institutions and strategic collaborations between public and private sectors.

The Future of Central Bank Independence

====================================================================

Question 2: Do you agree that the traditional argument that less central bank independence leads to higher inflation will (still) be relevant over the next 48 months in Western economies?

====================================================================

Answer:
Strongly agree
Confidence level:
Extremely confident
Comment:
The traditional arguments remain valid. Less independent central banks will be short termist and try to satisfy political objectives, which emanate from electoral cycle considerations. The same applies to the wider roles acquired by central banks. If bank supervisors become less independent, they will exercises greater regulatory forbearance to 'kick the can' instead of taking early and effective intervention. Banks will become weaker and the costs of banking crises will be greater, when they finally erupt.

====================================================================

Question 1: Do you agree that central bank independence in the Eurozone and the UK will decline over the next 48 months?

====================================================================

Answer:
Agree
Confidence level:
Confident
Comment:
There is certainly a serious risk to central bank independence around the world, partly because of the widened responsibilities of central banks during the crisis and also because of the rise of populist politics. In addition to the macro prudential and financial stability roles mentioned above, central banks have taken over new responsibilities in banking supervision and bank resolution. This has been the case for both BoE and the ECB. In Europe, the BRRD dictates that losses are imposed on private investors to protect the tax payer, by bailing in bondholders, shareholders and unprotected depositors. However, resolution actions by central banks that involved bail in have been fiercely attacked by politicians representing interest groups that suffered losses. Unfortunately, the independence of central banks has been eroded through political capture of central bank boards and other indirect actions by governments. If anything, central banks' widened roles require more, not less independence. If greater independence is not forthcoming, central banks should try to protect their existing levels of independence by going back to basics. Bank supervision, bank resolution and macro prudential policies can be left for other bodies, that will also need to be accountable and independent, but at least no one would be able to complain that central banks and their unelected governors have too much power.

German Council of Economic Experts' view of ECB policy

====================================================================

Question 2: Do you agree that the ECB's monetary policy masks structural problems of member states?

====================================================================

Answer:
Disagree
Confidence level:
Confident
Comment:
There is no doubt that political willingness to reform has faded but where's the evidence that this is due to the ECB? The fatigue is much more to do with the fact that the reforms that are proposed or dictated aren't growth or employment friendly.

====================================================================

Question 1: Do you agree that exceptionally loose monetary policy by the European Central Bank is no longer appropriate?

====================================================================

Answer:
Disagree
Confidence level:
Confident
Comment:
I don't understand how they can say that with inflation so much lower than the 2% target. Would they be saying that monetary policy shouldn't be tight if inflation was near 4%?

Pages