Lhe central banks, banks of banks, like to let themselves be seen as technicians, expert plumbers in monetary plumbing, whose decisions have nothing political in them. There statement by the governors of the European Central Bank (ECB), on March 13, which presented the modifications made to the operational framework of its monetary policy, offers an edifying illustration. The non-expert citizen will not understand a thing, and yet, it is his life and that of the entire city that the decisions of their central bank affect, while largely escaping democratic debate.
The central bank is this collective agent whose mission is to regulate the monetary system. Society should see it as a social structure created by it and acting for it. But it is not like that. The collective agent has been fetishized to the point that the central bank is taken for a conscious being, endowed with intentionality, pursuing its own ends (inflation at 2%), at a distance from the monetary community – you, me and all users of money – independent in the full sense of the term from political power.
This fetishization did not fall from the sky: it was the politician himself who chose to place the central bank at a distance from society and at a distance from himself, by including its “independence” in the mandate which governs its missions of monetary and financial stability. Perhaps one day, politics will decide to allow society to reclaim its collective power. In the meantime (probably a long time), the central bank’s statements are received as revealed truths.
So what did the institutional fetish of the euro zone say on March 13? That it needs an operational framework ” effective “able to “manage short-term money market rates”, where banks refinance each other. Robust, with a wide range of instruments to provide banks and markets with liquidity in good weather, high winds and storms. Flexible, adapted to liquidity needs which vary from one banking model to another. Efficient, which does not go against the direction of monetary policy, in other words which makes it possible to provide neither too much liquidity when the monetary policy direction is intended to be restrictive, nor too little when it becomes accommodating again. .
Illusive standardization
And finally compatible with the “harmonious and orderly functioning of markets” because, make no mistake, the market is the kingpin of the efficient allocation of resources, which just needs to be guided a little. And this while ensuring that the operational framework “facilitates the pursuit of the secondary objective” of the ECB, namely the support it provides to the general economic policies of the European Union – including the ecological transition – without prejudice to its main objective of price stability.
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