Central Bank Independence and the Future of the Euro

Panicos Demetriades

£60.00  |  $90.00
ISBN 9781788211536
£19.99  |  $30.00
ISBN 9781788211543
£19.99  |  $30.00
ISBN 9781788211550
160 pages   |  216 x 138mm   |  24 October 2019


"Drawing on his extraordinary professional experience, Demetriades discusses the value and curse of central banking. While the author argues in favour of central bank independence, he does not fail to address the challenge to central banks' legitimacy resulting from the latest period of crisis management. This book offers a comprehensive analysis of what might appear an irreconcilable duality in central banking between independence and legitimacy." – Filippo Taddei, former Economic and Labour Affairs Spokesperson of the Italian Democratic Party and Economic Advisor to the Italian Prime Minister

"An important and timely contribution to the topic of central bank independence in Europe’s monetary union. Based on his experience as an economist and as a former central bank governor, Demetriades presents the academic arguments for independence, the limits of the Euro-system’s framework for governance, and the necessary next steps to make sure the mistakes of the financial crisis are not repeated." – Claire Jones, Global Economy Reporter, Financial Times


Over the past decade central banks have taken on new and expanded roles in an attempt to manage the global financial crisis. The European Central Bank (ECB) has been no exception. If anything, because of the incomplete architecture of the euro, the ECB has faced more serious challenges than either the Bank of England or the Federal Reserve. With the onset of the euro crisis, the ECB was forced to take on powers that went well beyond the conventions of standard monetary policy to prevent European Monetary Union from unravelling.

Panicos Demetriades, former Governor of the Central Bank of Cyprus during the country's bailout in 2013, examines the role of the ECB and its adoption of these new powers, which have led to legal and political challenges, high level resignations and the controversial removal of central bankers from their posts without due process. Demetriades argues that at a time when stability and action are needed to secure the future of the euro, the very foundations of the Euro-system are being eroded, namely its ability to act independently. The book provides a lively and insightful account of the processes that can make or break the euro.


1. Central bank roles: historical context
2. Central bank independence in Europe: origins, scope and limits
3. Crisis management and legitimacy
4. The ECB’s policies during the crisis
5. Whatever it takes
6. Banking union
7. Small countries and why they matter
8. Political money laundering
9. Can the erosion of central bank independence be reversed?

Author Information

Panicos Demetriades is Professor of Financial Economics at the University of Leicester. Between May 2012 and April 2014, he served as Governor of the Central Bank of Cyprus and a member of the Governing Council of the European Central Bank. As Governor of the Central Bank of Cyprus, he oversaw a major restructuring and recapitalization of the Cypriot banking system and participated in discussions that led to the establishment of the Single Supervisory Mechanism in the euro area. His insights into the banking crisis in Cyprus have been published as Diary of the Euro Crisis in Cyprus: Lessons for Bank Recovery and Resolution (2017).

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