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Global Risks Report 2019

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  • Global Risks 2019
    • Preface
    • Executive Summary
    • Power and Values
    • Heads and Hearts
    • Going Viral
    • Fight or Flight
    • Future Shocks
      • Weather Wars
      • Open Secrets
      • City Limits
      • Against the Grain
      • Digital Panopticon
      • Tapped Out
      • Contested Space
      • Emotional Disruption
      • No Rights Left
      • Monetary Populism
    • Hindsight
    • Risk Reassessment
  • Survey Results
    • The Global Risks Landscape 2019
    • The Risks-trends Interconnections Map 2019
    • The Global Risks Interconnections Map 2019
    • Global Risks of Highest Concern for Doing Business 2019
  • Blogs and Opinions
  • Shareable Infographics
  • Press Release
Home Previous Next
Home Previous Next
Home Previous Next
  • Report Home
  • Global Risks 2019
    • Preface
    • Executive Summary
    • Power and Values
    • Heads and Hearts
    • Going Viral
    • Fight or Flight
    • Future Shocks
      • Weather Wars
      • Open Secrets
      • City Limits
      • Against the Grain
      • Digital Panopticon
      • Tapped Out
      • Contested Space
      • Emotional Disruption
      • No Rights Left
      • Monetary Populism
    • Hindsight
    • Risk Reassessment
  • Survey Results
    • The Global Risks Landscape 2019
    • The Risks-trends Interconnections Map 2019
    • The Global Risks Interconnections Map 2019
    • Global Risks of Highest Concern for Doing Business 2019
  • Blogs and Opinions
  • Shareable Infographics
  • Press Release

Monetary Populism

Escalating Protectionist Impulses Call Into Question Independence Of Central Banks

Illustration: Patrik Svensson

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What if the protectionist wave expanded to engulf the central banks at the heart of the global financial system? Against a backdrop of geo-economic escalation, calls could rise to “take back control” of independent monetary policy and to use it as a weapon in tit-for-tat confrontations between the world’s economies. Prudent and coordinated central bank policies might be attacked by populist politicians as a globalist affront to national democracy.

A direct political challenge to the independence of major central banks would unsettle financial markets. Investors might question the solidity of the global financial system’s institutional foundations. As unease deepened, markets might start to tremble, currencies to swing. Uncertainty would spread to the real economy. Polarization would hamper domestic political response, with mounting problems blamed on enemies within and without. Internationally, there might be no actors with the legitimacy to force a coordinated de-escalation. The risk of a populist attack on the world’s financial architecture could be mitigated by deepened efforts to maximize the popular legitimacy of central bank independence.

This could be done by bringing the public in—perhaps through formal consultative assemblies—to decisions on independence, accountability and stability. The greater the public understanding of and support for monetary policy mandates and tools, the less vulnerable they will be in times of crisis.

No Rights Left Hindsight
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