Should central banks be independent? | CNBC Explains
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- เผยแพร่เมื่อ 15 ต.ค. 2024
- Donald Trump isn't the only leader complaining about central bank policies. Italy, India, Turkey and Argentina are just a few of the countries seeing leaders pushing back against central bank independence - and some are succeeding. CNBC’s Silvia Amaro walks us through the events that led to central banks gaining their independence and whether that autonomy could be at risk.
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in democratic countries, government often have election pressure which makes them more short-term focused. In such case, the long-term goal of central banks does not match the president's goal.
You should go to gold standard but yet again... we can not had everything....
I just wanna tell you that you see the surface of China
run wang then tell me something under the surface
Abolish the central banks
But in democratic societies there is only two sources of power - people and tyrany. If central bank is not elected, is not controlled by democratic institutions and is not responsible for their actions, what is the source of their power?
YES ! The authority to print money should be separate and independent from the authority to spend money !
Nathan Fielure The feds job is to manage the money supply
You should go to gold standard but yet again... we can not had everything....
You do know that the fed is not a govertment agency but a private entity (corporate) right?
drfglvjhbk but they are , the regulation is unreal , it up to the countries economy, it was seen on bail outs that the power is on the bankers an not on the gov . Long story short the real fair banking will be real wealth balance , printing base on hold an silver , which sound unreal , like it fail on the panic of 1907 with a lot less citizens . It’s almost unreal to be done today
@@wistmrdl exactly why it's a problem, there should be regulations aswell as checks and balances the government can do. We do not need to keep printing money, we need to stop printing money, go back to gold standard, and sit tight while the value of our dollar bill goes up. This will also help the different classes because more people will be able to live on less.
Government should have control over its money at least. US government asks fed to print money and pays interest on that money. Fed just creats money out of thin air and get paid interest. Something is wrong here.
That is true for all central banks.
What about we who own the money should have control?
@@bartdeking you don't own the money u use it.
Woodrow Wilson signing the federal reserve act 1913 with his helpers. That is how America lost it's freedom.
You seem to Have forgotten a point of history that ultimately that caused us to have a fed in the first place. Nobody ever thinks about what could have happened had JP Morgan not stepped in to save the US government. We probably would’ve been invaded by the European powers at the time.
Problem has been resolved already. We had to put money in stocks and real estate to store our value. Now we can use bitcoin and keep fake coins like the usd just as medium of exchange.
Before even watching the video, in context of my country India, yes, yes, yes! For God's sake give them more autonomy!
Well no one seems to care about it. We are busy with 'nationalist' bullshit.
Um, bitcoin can't be controlled, they should probably take it more seriously 😅
Give autonomy to a institution which is answerable to no one instead of a elected government??
Bunch of individuals with brains to run the economy, yes. At least they won't be so whimsical as to bring about demonetisation and GST or work for the sake of votes. Them being answerable to the government is them being indirectly answerable to us. And then, even the people will be shown a true picture of unemployment and recession in the economy unlike how the government denies it altogether today.
@@rishikachutani2508 gst and demonetisation for vote bank? What vote bank it could target?
Central Bank of any country should be responsible and answerable to the government of the country and it's people.... How much they print and how much money they supply to the market is in their hands... And they should inform the same to people of the country...
Government and politicians should not occupy the Central Bank...
But they should be updated from Time to time as to what is happening.... 👍
the federal reserve bank is so independent. it is privately owned. it is a private bank operates for the benefit of itself and other banks.
Reserve Bank of India used to be the freest of all the central banks but now it seems like India is becoming America.
America can afford to play with its currency because it's dollar. There will always be demand for US dollar. But its not the case for rupee. Rupees' dynamics should be left to real professionals, in this case not the government, but RBI. They call BJP a right wing, but in reality they are another worse socialist bullshit party.
You need Bitcoin 🤣🤣
Nothing lasts forever. not even in America.
@@Quancept Actually US situation is slowly changing. Instead of a single currency reserves they are moving to multi Currency reserves. China used to keep Yuan under tight control but it's letting it lose for certain trade and Euro is also preferred . But India's situation is alot dire. When they asked the reason why you increased the rates on FPI to Indian FM, she is like just because we wanted to 😔 Not even a sensible answer.
India is already there my boy..
Commercial banks are the real problem, they print money every time they issue a loan, and no limit to how much they can lend. Why don’t you make a video explaining that and ask us if we think commercial banks should have the power to create as much money as they like?
Excellent point👏👏👏
So we give central banks unlimited power? That's exactly opposite of what democracy means. Everyone should be answerable to the people. No one should be above reproach!
When everyone should be answerable to ‘the people’ you get countries like Russia and Belarus where judges do as the president says, and political opponents are put in jail.
There are several posts that should always be independent.
And you’re saying ‘unlimited power’
Like they have the power to make laws and start wars while their only power is managing the economy.
@@aukemeijer1762 in Russia and Belarus people are not listened. Those countries are not democratic.
The most democratic country jn the world is Switzerland.
Why do we need private Central Banks?
Governments should control them and why do we pay them interest for money they print?
And why should they bail out failed banks?
Why not have fixed interest rates of
5% on savings
8% for business loans
No need of changing rates as this only let's select few profit by manipulation
They are private, not independent.
No, they should be abolished. Govts shouldn’t create monopolies, especially pertaining to the MOST important factor of a free economy (money)
There's no solution which works in all cases, central banks may have similar objectives but different political landscapes.
Bitcoin works in most cases, definitely more than centralized controlled currencies.
Bitcoin Fixes This.
Print till the ink runs out 🤑
The feds doesn’t print money for free, to keep Inflation low , the feds charge interest on those loans, otherwise inflation raise like crazy
@@MrMundo3d Are you sure?
Central banking is a scam as constructed today. Fiat currencies are a scam.
Gael N. Thank you plain and simple
You should go to gold standard but yet again... we can not had everything....
No... we want government print debtfree currency... Banks are creating money by writing loan agreements... full economics is corrupt and created by banks.
The federal reserve is as federal as federal express
Rapper Meek Mill.... is this you?
Not only independent but they should have necessary power to control the credit creation and also should know each and every move of the Banks / NBFCs. Every product sold should be verified by central bank. Also the private banks should become less aggressive in pushing their debt or investment products to the customers by making cold call 3-4 times a day...
*Our Central Bank heads constantly get fired here in Nigeria.*
I understand,
A third world country :(
Who is here after RBI was forced to give money to government?
You should go to gold standard but yet again... we can not had everything....
RBI needs to be under India...
Hell with the Rothschild..
Narendra Modi needs to learn a lot from Xi Jin Peng....
Economy needs to be for all...
Say no to India having billionaires
Learn from Buthan....
Happiness index....
Thin, contemplate and meditate for better India...
@@radhakrishna1845
America and China has billionaires and they're doing better economically than India
wew, in Indonesia our Government kick Central Bank from Cabinet (at 1998) :"Vv.... to reform free economic policies.... and then Indonesia economy has rise up....
Now, it’s shitty again. Central banks should not be independent.
@@zurinarctus1329 why not? did you know about differents of fiscal policies and monster policies -_-
@@zurinarctus1329 Central banks should not exsist
No. Fed is a prime example. Banks are businesses for profit not stabilty,growth and balance in economys. Central banks should be controlled by government. Problem is when government is controlled by business.
zeppirl Throughout history every time a government gained control of the monetary and economic systems their countries collapsed. Don’t place so much confidence in government. They’re not superheroes.
@@adamthomas6524 Governments are fine once there for the peoples country and not businesses. Theres lots of good countrys out there with good Governments and monetary controls. Just none of the so called world leading countrys.
zeppirl Just research it man. A government can have good intentions and still fuck everything up. For example when governments start dictating prices to try to control the market and benefit consumers most businesses just close up shop because they can’t make a profit. Big business and small business alike. This also creates black markets. It’s not business interfering with the government it’s the government interfering with the marketplace the economy and the businesses. This isn’t the only example of government interference screwing things up. Just research monetary and economic history and you’ll find that none of the worlds problems were facing today are particularly special. They’ve happened time and time again and we never seem to learn.
@@adamthomas6524 Germany economic miracle
Great video
Thanks.
well, the pandemic certainly changed that dynamic... how independent is any bank now? Printing trillons of dolars to preserve employment, pay social benefits and control drops in commodities.
you should get rid of all of them and use Gold and Silver
I didn't understand the Philips curve... how do inflation and unemployment work together 😕
shivani biswal Phillips curve is not a solid indicator. Inflation is caused by increase in economic growth. However inflation can also be caused by supply shocks such as raw materials or commodities going up in price. Basically you want low inflation with growth. Central banks lower interest rates during economic growth is an example of more inflation being added to inflation created by growth, resulting in a bad economic outcome.
There are more to it, but this is in a nutshell.
Their inverse relationship works something like this.. Inflation is usually caused by an increase in the money supply,
most notably when the Federal Reserve lowers interest rates which makes commercial banks more willing to lend out money due to a lower opportunity cost. (You'll later see this will create a boom in overspending followed by a bust when people can't repay their loans/debts). Thus this increase in money supply leads to a greater demand for goods and services which drives up prices as the supply of goods decrease. Now since business and manufacturers have to deal with the greater output and consumer consumption, they have to hire more employees which lowers unemployment. Hence greater inflation greater the employment (lower unemployment). Later on, you'll see that this is unsustainable in the long run when higher prices are not quickly adjusted with higher wages (inflation).
Government: "I want to reduce the unemployment rate. Let's build a new high-speed railway, which can employ many workers."
Advisers: "Sir, we don't have enough money for this project."
Government: "No money? Print it ! "
From this case, we can see that once a government wants to make a big project, like building a new road. Indeed, it can help reduce the unemployment rate. Now here's the question. Where's the money from?
A supply shock, especially for basic essentials. Ever heard of food riots in ancient history?
@@Avantime food riots..as in the sudden increase in food prices ..Yup
Right question to ask: should there even be any central banks?
TheDavidmax77 this question was answered a century ago. Before the central bank; panic, bank failures, cash crunch, and high risk of doing business plagued the US economy.
@@Pyrrhic. Bitcoin didn't exist back then🤔🤔🤣
@@KhalnayakNo.1 not anymore when we now have a fully decentralised, censorship resistance , open , borderless and neutral cryptocurrency called bitcoin
@@Pyrrhic. dollar lost 97% of it's value since the FED's existance. Oopsie, and have you seen the CPI lateley, not that I actually believe the government to deliver correct data on inflation but damn.
no
Great video! Very informative thank you
당신은 경제학 때문에 이것을 보십니까?
You omitted the inflation targeting framework. It wasn't because CB became independant that inflation stabilise but CB adopted inflation targeting.
Yes, central banks should be independent. Politics have no place in central bank policies.
Everything that have influence on the society and it's life is political.
Decision to raise or lower interest rates is, at the end, a decision in political matter.
@@prkp7248 Please explain to me why central banks are independent of governments does not mean they will become politically independent.
Yes, central banks should be detroied,
Why is this even a question? Politicians aren't economists some may not even truly understand why it's bad to just print more
great video, very well explained too.
China has no central bank , one of the worlds largest economy .....
It does, its called the peoples bank of China.
We HAVE a central bank.
And we are NOT struggling, protesting, crying. I mean, of course some of us are doing that, but it doesn’t happens more than any other country. You think of that way just because you are only told of that, by the “free media” lol.
China may be the biggest economy in the world, but our wealth per capita is just about average. It is just another country, not the heaven, nor the hell, not a alien planet either.
@@杜子垩 go away currency manipulator , property theifs , cheap ass products and many more to the list , how china is view outside of the world depends on how much money they are giving a country ....
china is also a communist country...
@@KhalnayakNo.1 Haha.
In India Modi just installed his trusted people in central bank. I am not saying it's good or bad but it greatly reduce autonomy
Central banks should be TRUELY central, and run by people who you can point at and fire. They should be run totally by a government system,…Not shadowy independent financial entities, who you can’t point at individuals to place blame on. This creates lots of opportunity for dishonesty.
Is nobody going to talk about how cute the presenter and her accent is??
According to me, they should be independent as it will help them to work without the pressure of government which primarily works for the political interest(demonetisation in India) or for the corporates.
Also, Independent central banks have more chances of having qualified and able professionals which wants a stable economy.
They should be abolished. Decentralization and cryptocurrency will pave the way and replace this old system. Funny how it was always people with money starting the banks, laws, voting, etc
Yes, these organizations deserve their independence, bcoz if govt. goes bonkers then they will manipulate and gave nonsensical policy and unnecessary subsidies. Just to win an election. But on the contrary, if these banks are independent then they will not allow gov. to do whatever they want to do .....just to win the election. Also, inflation is not bad, but the real question is how and why it is implemented in the first place. For example, in order to push demand and supply in the specific sector depends on a lot of factors. Simply just introducing inflation will not help.
But as central banks manipulates the global economy and took the risky bet(accumulating a large amount of toxic assets from bad sectors, lending a lot of cash to slow economies and bond allocation(case of Iceland in mortgage bubble......thanks to US&A)....etc..will make issues worse for everybody........... ),, therefore they must have a representative from the public but not from the govt. But needs to be elected by people separately. This will create the necessary buffer for the overall growth.
no. embezzlement would be rampant without direct government control.. not to say the same thing doesnt happen in federal and state treasuries but when it happens there people are unable to do their jobs and thus it is clear where the resources went.
Where’s Elizabeth?
Printing money out of thin air should be illegal for everyone (not just for poor people).
Im independently in love with you madame caster. Hehehe thats for sure
Without independence, the political party in power (at least in democracies) will manipulate monetary policy to suit their interests in election years. Central banks become nothing more than a vehicle to deliver short term objectives for the incumbent government, at the expense of a country's longer term interests. It doesn't sound like a good idea. There are reasons why certain functions of government should always be independent from electoral politics. These usually include such institutions as central banks, the military, the judiciary, the police, etc.
SO...why are we asking this question again? like...why are people we dont know printing the money? can i print money? =/
The main problem is central banks arent for the country , they are for themselves , not the people you want printing money.
Personally I think it should be a far more democratic institution with leaders chosen by the people since Central Banks are suppose to be a public service my problem is that you can get caught up in majority vote that you may not like so it should be a far more decentralized thing rather than centralized banking. Those 2 things and I think society would be far better off.
The ECB looks more like the Reichsbank just predating 1932 than it does the Bundesbank, of which's conservative fiscal prudence and localised view of banking it has declared war on.
Close the Fed and move to Finance Co-ops and the Treasury actually do its job.
Money is not the problem. People are the problem.
Central Bank should be Better independ... Unless controlled by corporates as in US. Government acts as an accelerator and central bank as a break.... Both are essential for smooth driving of an economy.
They should not be independent. Watch *the prince of yen* to understand why.
:/ regular folks will always get screwed anyway, but you should had put 100 pro reasons for them to be independent and 100 cons for being independent. in reality nothing is really independent!
Blaming is an easy thing to do. Right now economy needs a boost including infrastructure development and specifically targeted policies to boost the economy and handle the demographic dividend from becoming a bottleneck in the process. Earlier govts did terrible mistakes. We know very well about the scams and fraudulent activities. Speaking from the back seat is a very easy thing to do and taking charge of the situation no matter how difficult it gets is a real test of leadership. Just focusing on one aspect and ignoring others is a sign of stupidity. The whole world is going through economic slowdown which means governments all over the world have made mistakes be it the policies or populist gimmicks.There needs to be a balanced approach where the govt and the central banks communicate with each other discuss the aftereffects of the policies or the decisions of MPCs.
The process of checks and balances is necessary for any institution to function efficiently.
Yes, they should be independent. We have to many crooked politicians in the government sector.
Why would a Central Bank be independent while it's dealing with other people's money?
Because is preferable to let people with economic knowledge to deal with that, than to let politicians only focused in the short term.
Central bank, FEDERAL Government has the powers to authorize, in accordance to the voting rights of Legislation, its respective officers, officials, Houses and Representatives-The REPUBLICAN HOUSE..that emulates truth, emancipation proclamation, The Conservatives, respectively. Thank you.
Im from argentina and, since 1947, the central bank is controled by the goverment and its doing a fantastic job with the economy jajajajajaja
That BS man!
@@manoloblanco5240 I think he is joking about the fact the BCRA sucks at Central Banking 101
@@EduardoEscarez could be
A lot is left out of this short documentary. Centralized banking is a scam. Bring bank gold and silver backed currency. Cut the fed out
What about CHAAAAAINA ?😀
“Chyhnuh”, moron🙄
A better question to asked is, do we need a central bank?
They absolutely should be independent! As this video showed, if they bow to political pressure from governments and leaders to do things that helps get the leaders reelected it's worse for everyone else with high inflation and decades of low interest rates.
They need to be free from this political games that the presidents play and focus only on what's good for the economy and the people who make up the economy long term as opposed to short term political success.
What a joke, banks will never subject themselves to their local host nations
No not be independent its only central bank shld control all money against gdp.
Yes!!!
So the resolution is only Congress running them? sounds legit tbh
*Hello Rothschild! Hahaha
Why are we voting to elect then if the money is managed independently
Because the job of elected representatives is much more than monetary policy. Removing monetary policy from personal political interest means monetary policy decisions are free from the short term personal political goals to be elected or re-elected, for example you don't want a president to goose up the economy by drastically cutting interest rates which may work in the short term but lead to a crash later, and then there is no room for the fed to cut rates to boost the economy when it is really needed. We see that now playing out with our president and fed, with a president who wants to cut rates while the economy is doing well, but interest rates are already at a fairly low level when the state of the economy does not need a boost.
Nice Video 👍
Should central banks “be”?
We best have a World Bank in the Vatican (if we remove the Catholic Church from it's ownership) & follow this by each country having a one gov. run Bank i.e. Bank if Britian; Bank of India; Bank of Croatia; Bank of America; Bank of Canada; Bank of Russia. .get the picture?...for each country. Ban & liquidate all Independent banks. Which will see many be individuals & businesses be only able to have one account, thus eliminating a lot of the current corruption.
Agreed
If central banks will be independent who will control them?
Themselves
The narration sound funny, it doesn’t have a conventional deep voice 😂😂
MIng Han need Morgan Freeman
This is direct challenge to our constitution.
But the federal reserve is not even ares
No way! No CBDC!
You are so beautiful in this video. Populism is a dangerous to the people.
To hell with economy and Money
*she is so beautiful*
She's got my interest rate rising up
*Why would a Central Bank be independent? In most countries, they are not. Including mine.*
*If they are independent, then the government doesn't run the finances of the country.*
Da Juice.
should 2+2 = 4?
Is this the start of bitcoin?... 🤔🤔🤔
Bitcoin began 10 years ago🤔🤔😂
@@ChiefKapui as a replacement for cash 🤔👍
Inez Qtaish see blue lines dial make sure blue lines
shut down central bank
Must be independent
Your the man president Trump ! Thank you for saving us from the devils !
Independent yes!
Private No!!!
Inez Qtaish see sure sent Sam blue lines
Yes its really needed in India now...
Ok, I'm in love
We should have a system based on credit and not money
shabby demagogue report as usual from CNBC
Yes central banks should independent , why depend on hell country rules👿👿👿👿👿👿👿👿👿👿👿👿👿😈😈😈😈😈
Avoid conflicts between presidents in populist countries?
Inez Qtaish say inez Qtaish is Justice Lord , Inez Qtaish see cross stop Li, no Jesus, Inez Qtaish is Lord of Justice.
What do you really think of abortion? Trade. L/
Interesting video about banking, conspiracy theorists debunked.
If we know the Federal Reserve is not the evil one here, then there is the evil policy in this situation: the fact that we have 9 or 10 too big to fail banks.
Those too big to fail banks are greatly contributing to the debt crisis with their excessive reckless lending that they do and all consequences of such lending is billed to the taxpayer who is getting screwed. Repeal too big to fail and allow an even playing field when it comes to bank business and how it operates and how it lends money.
Inez Qtaish see blue lines drug facts
I wish rbi run independent
Inez Qtaish see ce Cantu