Central Banking in Central and Eastern Europe: Lessons From the Interwar Years' Experience
IMF Working Papers, October 1, 1994
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- Central Banking in Central and Eastern Europe: Lessons From the Interwar Years' Experience
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Bibliographic details
- Authors: Marcello De Cecco
- Published: October 1, 1994
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451854954.001
Summary
- Author: Marcello De Cecco
- Date: October 1, 1994
- This paper examines the philosophies which inspired the institution of central banking in Central and Eastern Europe in the interwar years.
- Influenced by the Financial Section of the League of Nations, the new central banks adopted laws which prohibited or severely restricted the financing of government fiscal debt.
- New central banks were encouraged to centralize their payments systems and manage exchange rates to keep control of the money supply and achieve monetary stability.
- Central banks subsequently adopted further provisions in the area of banking supervision to regulate commercial banks.
- The paper considers the particular cases of Czechoslovakia, Hungary and Poland.
Major themes and findings
- Legal constraints on fiscal financing:
- New central bank laws "prohibited or severely restricted the financing of government fiscal debt."
- Payments system centralization:
- Centralization of payments systems was promoted as a means to control the money supply.
- Exchange rate management:
- Managing exchange rates was used to achieve monetary stability and maintain control over the money supply.
- Expansion of supervisory roles:
- Central banks were "forced to adopt further provisions in the area of banking supervision to regulate commercial banks."
- Geographic focus:
- Case studies: Czechoslovakia, Hungary, Poland.
Subject areas and keywords
- Subject: Bank credit, Bank legislation, Bank supervision, Banking, Central bank legislation, Central banks, Commercial banks, Financial institutions, Financial regulation and supervision, Open market operations
- Keywords: Bank legislation, Bank supervision, brand new central bank, Central and Eastern Europe, Central bank legislation, central bank legislator, central bank reconstruction, Commercial banks, Danubian country, Eastern Europe, Europe, government commissioner, joint stock, note issue, Open market operations, organization of clearing arrangement, payments network, renewed central banks, state capital, State involvement, State power, WP