In Search of a Green Macro-Financial Regime: Central Banks and Finance
Dr. Benjamin Braun and Professor Daniela Gabor discuss the path to a Green Macro-financial regime.
About this event The success of 'independent' central banks in avoiding inflation is a crowning achievement of the macroeconomic policy consensus over the past four decades. Yet the swelling of balance sheets, the resurgence of inflationary pressures, and the looming threat of climate catastrophe all demand we interrogate the deeply political considerations that animate central bank policy. In particular, understanding the relationship between central banking and private finance is essential to examining these institutions' current operations and projecting directions for reform.
In this talk, Dr Braun and Professor Gabor will examine the different perspectives on the path to decarbonisation, from the Wall Street Consensus' financial capitalism with de-risking, to the 'Ecological Leninist' advocacy for central planning. Central to any path is a coherent macro-financial regime, constituted by: the organisation of financial actors; the money creation process and role of sovereign debt; the macro-institutional architecture; and the power relations that emerge from specific configurations.
A green macro-financial regime must move beyond the Keynesian and Financial Capitalist modes of organisation that have hitherto prevailed; however fundamental issues must be resolved vis-à-vis the mechanisms of coordination, macroeconomic policy, and degrees of nationalisation. This talk will be a crucial first step is presenting a taxonomy of these issues!
Following speaker presentations, there will be ample time for questions from the audience, so do come prepared! Relevant background reading: Dr Benjamin Braun's paper (summarised in this FT article) on the infrastructural power of CBs as it pertains to the resuscitation of market-based finance following the global financial crisis, highlighting the ways in which financial interests have shaped central banking policy. To quote at length from his article: "Financial markets, especially repo and securitisation markets, have come to serve as the infrastructure for monetary policy. The result has been a problematic alignment between the interests of bankers and central bankers, whereby both sides have a preference for a deep and liquid markets for … everything, ideally"
Professor Daniela Gabor's discussion of the politico-financial nexus that may compromise a holistic approach to a green transition, examining the role of central banks in the fiscal monetary architecture of the 'Wall Street Consensus', whereby: " development becomes a strategy of green financialization through which private finance manages the environmental crisis..." To listen do Professor Gabor discuss these issues, we highly recommend her appearance on the Odd Lots podcast