Regionalism and Global Economic Integration: Europe, Asia, and the Americas

By William D. Coleman; Geoffrey R. D. Underhill | Go to book overview
Save to active project


Strapped to the mast

EU central bankers between global financial markets and regional integration

Kenneth Dyson,Kevin FeatherstoneandGeorge Michalopoulos

Since the early 1980s, national central banks in Europe have been operating within a dramatically changing environment. First, there has been a process of globalization of financial markets. Financial innovation and liberalization of capital movements, especially under the auspices of the Single European Act, have led to the internationalization of financial markets, thereby altering the systemic relationships that govern monetary policy-making. Foreign exchange market turbulence in the 1980s and early 1990s clearly demonstrates the enhanced power of major financial market actors, illuminates the more powerful constraints on state economic policies and suggests evidence of a crisis of effectiveness of traditional monetary and exchange rate policy instruments. Second, within Europe, the relaunch of Economic and Monetary Union (EMU) in the late 1980s represented a major political challenge to the power of national central banks. It added a second source of uncertainty and potential instability to their operating environment.

In this context of dual assaults from global market contingencies and regional political pressures, central bankers have sought to ‘strap themselves to the mast’, in the manner of Odysseus, by adhering to a professional ideology of central bank independence. That ideology rested on a professional dedication to the value of price stability, and to the belief that commitment to price stability could only be made credible if central banks were made independent in their use of monetary policy instruments.

This chapter analyses the impact of the European Union (EU) central banking community in the regional process of Economic and Monetary Union negotiations through the signing of the Maastricht Treaty. It highlights the ability of central banks to secure their corporate interests through their participation in the making of EMU. The design of the final stage of EMU was almost exclusively negotiated within the world of central banks. Price stability has become the primary target of EMU, while political and economic independence of the ‘new’ EU monetary institutions, the European Central Bank (ECB) and the European System of Central Banks (ESCB), has been ensured. We argue that by promoting independence, central bankers were attempting to limit the loss of power they suffered because of globalized financial markets and the regional process of EMU.


Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this page

Cited page

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited page

Bookmark this page
Regionalism and Global Economic Integration: Europe, Asia, and the Americas


Text size Smaller Larger
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen
/ 254

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?