During the last thirty years, most governments around the world have supported the long-run process of financial expansion that turned out to be characterized as the “financialization” of the capitalist economy. In this historical scenario, monopoly-finance capital became increasingly dependent on bubbles that, both in credit and capital markets, proved to be global sources of endogenous financial fragility. Financial and currency crises have also revealed that monetary and supervisory authorities do not cope with the complexity of the global, profit-seeking, innovative and speculative portfolios of investors and banks.
Central banks, in a context of financial liberalization, do not face financial disturbances easily. Indeed, credit squeeze, volatility in the valuation of assets, the menace of recession, the shift of investors toward liquid and safe assets, among other factors, put pressure on central banks and treasuries.
The idea of autonomous monetary management collapsed under the 2008 global financial crisis. As a matter of fact, the crisis showed that the central banks´ actions are not independent from private and public pressures. The social conflicts that emerged within the markets shifted to the political sphere and proved to challenge money as a public good – since livelihoods have been subordinated to the bailouts of the financial systems. Besides, the increasing growth of sovereign-debts has imposed the adoption of austerity programs which burden that mainly rely on workers and taxpayers.
Indeed, since the global financial crisis, monetary policy has been brought to the forefront. Considering this background, we welcome the recent Edward Elgar publication of The Encyclopedia of Central Banking, edited by Louis-Philippe Rochon (Associate Professor and Director, International Economic Policy Institute, Laurentian University, Sudbury, Canada and Co-editor, Review of Keynesian Economics) and Sergio Rossi (Full Professor of Economics, University of Fribourg, Switzerland). The entries of the Encyclopedia provide an update and a critical understanding of the complexity of monetary-policy interventions, their conceptual and institutional frameworks, and their own limits and drawbacks. Besides, controversial explanations of financial institutions, policy monetary tools and the crisis are presented from a historical perspective.
Indeed, this Encyclopedia certainly provides the pluralistic view we need to privilege in the contemporary studies of central banking.