The Democratic Challenge of Central Bank Credit Policies

Abstract This article provides a framework for understanding the economic role of central banks and their democratic legitimacy. I argue that thinking about challenges banking requires considering banks’ insurance how actions are part credit policy . The contract between bank sovereign is incomplete because it cannot integrate all unforeseen contingencies, distributive consequences interactions with other policies. opens door to viewing legitimacy decisions through process deliberation, coordination reflexivity, rather than only delegation power. discuss proposal European Credit Council, which would be deliberative body aimed at strengthening Parliamentary power on monetary policies, in Euro Area as well its More coordination, deliberation consistent independence aim delimit more precisely action within macroeconomic policies State.