Financial Crises and the Dismissal of Central Bank Governors: New Evidence

Artha, I Kadek Dian Sutrisna; Haan, Jakob de

doi:10.1002/ijfe.1508

Cited by 15 publications

(10 citation statements)

References 27 publications

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“…It also complements other recent findings, such as Artha and de Haan (2015) who find that systemic banking crises, but also debt crises, significantly increase the likelihood that a central bank governor is dismissed (see also Dreher et al, 2008). Importantly, our baseline estimations also suggest a strong peer effect among countries.…”

Section: Masciandaro D Romelli European Journal Of Political Ecosupporting

confidence: 64%

Central bankers as supervisors: Do crises matter?

Masciandaro

Romelli

2018

European Journal of Political Economy

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Global Financial Crisis many countries have changed their financial supervisory architecture by increasing the involvement of central banks in supervision. This has led many scholars to argue that financial crises are an important driver in explaining the evolution of the role of central banks as supervisors. We formally test this hypothesis employing a new database that captures the full set of supervisory reforms implemented during the period 1996-2013 in a large sample of countries. Our findings support the view that systemic banking crises are important drivers of reforms in supervisory structure. However, we also highlight an equally important peer effect, namely a tendency of countries to reform their financial supervisory architecture when others do so as well. We construct several measures of spatial spillover effects and show that they can explain institutional similarities among countries and impact the probability of reforming the role of the central bank in financial sector supervision.

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Section: Masciandaro D Romelli European Journal Of Political Ecosupporting

confidence: 64%

Central bankers as supervisors: Do crises matter?

Masciandaro

Romelli

2018

European Journal of Political Economy

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“…Several recent papers have examined economic and political determinants of the central bank governor turnover rate. For instance, Keefer and Stasavage (2003) Artha and de Haan (2015) find that also financial crises increase the probability of a turnover. Vuletin and Zhu (2011) differentiate between new governors drawn from the ranks of the executive branch of the government ('government ally') and new governors who come from outside the executive branch ('non-government ally').…”

Section: Turnover Ratesmentioning

confidence: 99%

The Politics of Central Bank Independence

Haan¹,

Eijffinger²

2019

The Oxford Handbook of Public Choice, Volume 2

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This chapter reviews recent research on the political economy of monetary policymaking, both by economists and by political scientists. The traditional argument for central bank independence is the desire to counter inflationary biases. However, studies in political science suggest that governments may delegate monetary policy in order to detach it from political debates and power struggles. The recent financial crisis has changed the role of central banks, as evidenced by unconventional monetary and macro-prudential policy measures. Financial stability and unconventional monetary policies have stronger distributional consequences than conventional monetary policies, with implications for central bank independence. However, the authors’ results do not suggest that that has happened in the wake of the Great Financial Crisis, nor has there been higher turnover of central bank governors.

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“…Papers such as Dreher, Sturm, and De Haan (2010) have analyzed the determinants of central bank governor removals and have found that the probability of a central bank governor being removed increased with political instability, the occurrence of elections or the share of legal term in office. Other papers such as Artha and de Haan (2015) find that financial crises are also an important determinant of central bank governors' removal. Using conditional fixed effects logit models that are similar to the models used in the papers aforementioned as well as Vuletin and Zhu (2011), we decompose central bank governors' turnovers into premature removals, that is, removals that occur before the end of the governor's legal term in office and ally replacements, that is, that is the central bank governor is replaced by an ally to the president.…”

Section: Introductionmentioning

confidence: 98%

Do commodity price shocks impact central bank governors' removals? Evidence from Africa

Strong

2020

Int. J Fin Econ

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Using data from 1980 to 2018 for 32 African countries (13 CFA countries and 19 non-CFA countries) and a conditional fixed effects logit model, this paper examines the effect of commodity price shocks on the likelihood of a central bank governor removal. Governor removals are decomposed into premature removals and ally replacements. Our results show that commodity price shocks lead to a statistically significant increase in the probability of a central bank governor's premature removal and ally replacement. This trend holds when commodities price shocks are separated into oil/mineral shocks and agricultural commodities shocks. We also find that this probability significantly jumps for countries who have a lower degree of export diversification, that is, countries whose are primarily dependent on a single commodity.

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Financial Crises and the Dismissal of Central Bank Governors: New Evidence

Cited by 15 publications

References 27 publications

Central bankers as supervisors: Do crises matter?

Central bankers as supervisors: Do crises matter?

The Politics of Central Bank Independence

Do commodity price shocks impact central bank governors' removals? Evidence from Africa

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