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

The Future of Central Bank Independence

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

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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

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

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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.

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

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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%?

German current account surpluses

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Question 2: Do you agree that the German government should increase public spending given its persistently large current account surplus and given that it is part of the Eurozone?

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Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
I don't think public spending is the only way forward, Germany needs to find ways to increase private spending.

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Question 1: Do you agree that German current account surpluses are a threat to the Eurozone economy?

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Answer:
Agree
Confidence level:
Very confident
Comment:
Germany needs to find ways to spend some of its surpluses, which would also help to increase demand in the Eurozone periphery. This imbalance may well effect structural factors, as Jens Weidman suggests. It doesn't mean, however, that it shouldn't be addressed. Other countries are asked to make structural reforms to become more competitive and reduce spending. Germans should overcome the fear of spending!

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