Eric Monnet, 26 March 2021

Since 2008, a new central banking model has emerged. Monetary authorities increasingly engage in targeted lending, hold large amounts of public debt, and focus on climate change. This column argues that the new practices of central banks call for an updated institutional framework in order to maintain democratic legitimacy. It proposes the creation of a European Credit Council, which would provide impartial assessments of the ECB’s decisions, particularly those with large distributional consequences. In addition, it would develop proposals for coordinating monetary policy with other EU policies and reinforce the role of the European Parliament.

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