Central banks and competition authorities: institutional comparisons and new concerns

John Vickers

No 331, BIS Working Papers from Bank for International Settlements

Abstract: The establishment of independent authorities for monetary policy and for competition policy was part of the institutional consensus of the Great Moderation. The paper contrasts how policy has operated in the two spheres, especially as regards the role of law. It then discusses the application of competition policy to banks before and during the crisis, and relationships between competition and financial stability. Finally, the paper considers whether the financial crisis - which has led, at least temporarily, to unorthodox and less independent monetary and competition policies - has undermined the long-term case for independence. The conclusion is that it has not. While regulation of the financial system clearly requires fundamental reform, sound money and markets free from threats to competition remain fundamental to long-run prosperity; those ends are best pursued by focused and independent monetary and competition policies.

Keywords: central bank independence; monetary policy; competition law; merger policy; financial stability; banks (search for similar items in EconPapers)
Pages: 33 pages
Date: 2010-12
New Economics Papers: this item is included in nep-ban, nep-cba, nep-com, nep-mon and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:bis:biswps:331

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