Central Banking in Turbulent Times

Francesco Papadia has nearly 40 years of central banking experience. Beginning with the founding of the European Central Bank (ECB) in 1998, he served as the Director General for Market Operations until 2012. Prior to that, he held various positions at the Banca d'Italia and was Economic Advisor at the EU Commission. Currently he is Chairman of the Board of the Prime Collateralised Securities, Chair of the Selection Panel of the Hellenic Financial Stability Fund, Senior Resident Fellow at the Bruegel Institute, and a university lecturer.Tuomas Välimäki is the Head of Monetary Policy and Research at the Bank of Finland. As the Bank's Chief Economist, he is a member of the European Central Bank's Monetary Policy Committee. During his two decades as a central banker, he has also worked as a visiting expert at the European Central Bank.

• Introduction 1. Central banking before the Great Recession 1.1: Changing nature and objectives of central banks 1.2: Dominant central bank model before the crisis 1.3: The unsettled issue of financial stability 1.4: Planting the seeds of the Great Recession: macroeconomic, regulatory, supervisory, and intellectual aspects 2. Central banking during the Great Recession 2.1: Monetary Policy 2.2: Financial Stability 3. Central banking after the Great Recession 3.1: Hits to the pre-crisis central bank model 3.2: Was the pre Great Recession central banking model jeopardized? 3.3: Strategic and operational issues 3.4: Central banks in a new regulatory and supervisory landscape 3.5: How wide will the scope of responsibilities of central banks be? 3.6: Possible adaptations to the central banks model

The global financial crisis started a transformation of central banking by showing that the nexus between price stability and financial stability is more complex than was previously understood. In this book, Francesco Papadia and Tuomas VÃlimÃki, not only offer a superb survey of the central banking experience through the crisis, but also identify the most important future challenges to monetary policy. An essential and provocative read to a broad range of audience from policy-makers to market analysts, from scholars to students of economics, to all those who want to deepen their understanding of central banks in the great financial crisis and their challenges thereafter.