Central Banking: Back to the Future

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Intermediari Finanziari

Central banking is a field in which cooperation within Euro Area appears at a good level. There is a strict coordination between home central banks through ECB; as a result, Euro is a very reliable currency. Nevertheless some issues in central banks’ behaviour exist, telling the truth, either in Europe or in other countries. Particularly, banks’ funding and banking systems’ performances monitoring worth a careful analysis, above all in Euro Area. We start considering central banks’ microeconomic policy outside the latter: the Federal Reserve System, Bank of Japan, Bank of England, pointing out interesting differences in monitoring policy and in refinancing policy. In Euro Area we pay attention to: 1. (apparent) lack of a last resort window; 2. shortage of ordinary credit facilities tools; 3. absence of a clear distinction between a supervisory policy, i.e. pertaining to a supervisory authority, coinciding (Italy) or not (Great Britain; Japan) with home central bank, and a monitoring policy, institutionally pertaining to the latter. A modern (efficient) central banking approach is plotted as final remarks.