Cahier 2015-03

Title:The Act of 1973 on Banque de France’s independence: the myth of the end of advances
Abstract:A stubborn myth presents this Act as a conspiracy, allegedly giving the Banque de France solid independence and stymieing any subsequent allegiance to the Government. The State would have been forced to turn to the markets for financing, leading to an increase in the public debt. For the far left, the nationalist right-wing and also for M. Rocard or J Attali, this Act would mark a break in the financial relations between the bank and the government, blocking the possibility to mint money in order to finance public spending and obtain the Bank’s cooperation at zero cost. In reality, article 19 of the Act upholds the possibility for the Government to obtain advances and loans… The Act of 1973 very clearly protects the possibility for the Government to obtain finance from the Banque de France – even at no cost – and keeps it under strict guardianship
Keyword(s):Banque de France, public debt, central bank independence.
Auteur(s) :BLANCHETON Bertrand
JEL Class.:G20, N10, N20, N40

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