¹ Although this framework is considered by many to be self-evident and indisputable, it is also the result of a long and conflictual historical process: B. Braun and L. Downey, ‘Against Amnesia: Re-Imagining Central Banking’ (Council on Economic Policies, 10 January 2020) https://www.cepweb.org/against-amnesia-re-imagining-central-banking/, visited 25 January 2024.

² R.M. Lastra, Legal Foundations of International Monetary Stability (Oxford University Press 2006) p. 44. The literature uses empirical studies and creates a legal index (based on selected legal provisions and indicators) for the purpose of developing economic and statistical tests that show a negative correlation between central bank independence and inflation.

³ The support for independent central banks is not unanimous. Policymakers and scholars have debated the need for better coordination with parliaments and governments in times of economic crisis. Questions surrounding the accountability and legitimacy of central banking tools have also spawned debates about central banks’ independence. Lately, the distributional effects of both conventional and unconventional monetary policy tools have engendered new debates about the need for increased political awareness and involvement in monetary policy design. The effect of monetary policies on inequality has been analysed by many researchers. For example, the empirical effects of monetary policies on inequality were investigated by S.B Carpenter and W.M. Rodgers III, ‘The Disparate Labor Market Impacts of Monetary Policy’, 23 Journal of Policy Analysis and Management (2004) p. 813; O. Coibion et al., ‘Innocent Bystanders? Monetary Policy and Inequality’, 88 Journal of Monetary Economics (2017) p. 70; A.K. Bartscher et al., ‘Monetary Policy and Racial Inequality’ (FRB of New York Staff Report, January 2021), https://www.newyorkfed.org/research/staff_reports/sr959.html, visited 25 January 2024. See an overview over literature in A. Colciago et al., ‘Central Bank Policies and Income and Wealth Inequality: A Survey’, 33 Journal of Economic Surveys (2019) p. 1199.

⁴ ie the interest rate that commercial banks pay to have deposits at or borrow money from the central bank, which enables them to lend money to individuals and corporations. See Lastra, supra n. 2, p. 44-46.

⁵ There are also arguments in favour of central banks, as financial supervisors, having at least operational independence, but this relies on a slightly different justification. See, for example, A. Khan, Legal Protection: Liability and Immunity Arrangements of Central Banks and Financial Supervisors (International Monetary Fund 2018) s III.

⁶ A. Tooze, Crashed: How a Decade of Financial Crises Changed the World (Penguin 2018) ch. 18.

⁷ For example, the Bank took an important role in negotiating structural reforms of the Greek economy in the context of the Greek debt restructuring and crisis packages. See in general ch. 6 of the reviewed book (entitled ‘The Prelude to the Sovereign Debt Crisis: Events, ECB Verbal Interventions and EU Rescue Programmes’). See also ibid., p. 290-295.

⁸ See ch. 12.2 (‘The Financial Stability Objective’) of the reviewed book.

⁹ ‘Unconventional monetary policy’ is a common term used by central banks themselves, as well as researchers. For an overview of unconventional monetary policies across jurisdictions and their effects, see S.M. Potter and F. Smets, Unconventional Monetary Policy Tools: A Cross-Country Analysis (BIS 2019). See also V.V. Acharya et al., ‘Whatever It Takes: The Real Effects of Unconventional Monetary Policy’, 32 The Review of Financial Studies (2019) p. 3366. For an overview of the literature on the effects of and the lessons learned from the period before the Covid-19 pandemic, see D. Lombardi et al., ‘A Survey of the International Evidence and Lessons Learned about Unconventional Monetary Policies: Is a “New Normal” in Our Future?’, 32 Journal of Economic Surveys (2018) p. 1229.

¹⁰ See in general part I of the reviewed book for an introduction to the concept of the ‘European Macroeconomic Constitution’.

¹¹ Treaty on European Union (Maastricht Treaty) [1992] OJ C 325/5, Art. G.

¹² The 10 principles are listed supra in the introduction.

¹³ The cases from ECJ are 27 November 2012, Case C-370/12, Thomas Pringle v Government of Ireland and Others, ECLI:EU:C:2012:756; 16 June 2015, Case C-62/14, Peter Gauweiler and Others v Deutscher Bundestag, ECLI:EU:C:2015:400; 1 December 2018, Case C-493/17, Heinrich Weiss and Others v European Central Bank, ECLI:EU:2018:1000.

¹⁴ The zero lower bound is the macroeconomic problem that occurs when the short-term nominal interest rate is at or near zero, causing a liquidity trap and limiting the central bank’s capacity to stimulate economic growth with the traditional tool of lowering interest rates.

¹⁵ Central banks have started to reduce their holding of government bonds, which has its own negative consequences. The Bundesbank announced in March 2023 that it had suffered a 1 billion euro hit from its bond holdings, as it grappled with the impact of higher interest rates. See G. Chazan and M. Arnold, ‘Bundesbank May Need Recapitalisation to Cover Bond-Buying Losses’ (Financial Times, 26 June 2023).

¹⁶ As an example, in September 2022, the Bank of England stepped into Britain’s bond market to stem a market rout. It pledged to buy around GBP 65 billion of long-dated gilts after the government’s tax cut plans triggered the biggest sell-off in decades. The Bank of England had already planned to cut GBP 80 billion over the next 12 months in its holdings of bonds bought after the global financial crisis of 2007–2008 and during the COVID-19 pandemic. However, due to potential risk to the stability of the financial system, the Bank of England also delayed the start of a programme to sell down its GBP 838 billion of government bond holdings. See D. Milliken, ‘Bank of England to Buy 65 Billion Pounds of UK Bonds to Stem Rout’ (Reuters, 28 September 2022) https://www.reuters.com/markets/europe/bank-england-buy-long-dated-bonds-suspends-gilt-sales-2022-09-28/, visited 26 July 2023.

¹⁷ Financial stability and climate risk are seen as interconnected. On the role of the European Central Bank concerning climate change and legal limits, see M. Ioannidis and C. Zilioli, ‘Climate Change and the Mandate of the ECB: Potential and Limits of Monetary Contribution to European Green Policies’, 59 CML Rev. (2022) p. 363. For a critical view on the limited effect of central bank policies on climate change, see J. Cullen, ‘Central Banks and Climate Change: Mission Impossible?’, 9 Journal of Financial Regulation (2023) p. 174.

¹⁸ There may be good reasons to provide independence to authorities other than central banks, but the justification for the independence should be specific to the institution and its role. The delegation of powers to independent central banks more broadly rests on the premise that monetary policy is based on rules rather than discretion, that the implementation is technical rather than political and value-based, and encompasses a minimum of distributive effects. Value-based and political issues typically come under the remit of elected representatives under democratic control.

¹⁹ eg Peter Gauweiler and Others v Deutscher Bundestag, supra n. 13, at [75].

²⁰ In the EU, independent authorities are called ‘EU agencies’. They are independent bodies set up by the EU to carry out technical, scientific or administrative tasks in order to assist the EU and its member states in their work. An overview of the EU agencies can be found at https://euagencies.eu/, visited 25 January 2024.

²¹ See for example one contribution on this topic, M. Goldmann, ‘Adjudicating Economics? Central Bank Independence and the Appropriate Standard of Judicial Review’, 15 German Law Journal (2014) p. 265.

²² Tuori shows how the development of economic theory on inflation has shaped the central banks over time. While he introduces the reader to the opposing views of monetarist and Keynesian economics, he also explains how an emerging consensus brought the two opposing camps closer together (neoclassical economists and new Keynesians) and thereby enabled a new (and for a time a relatively stable) fundament for central bank policies. This new foundation embraced independence and inflation targeting as a means to achieve price stability. Touri is careful to note that economic theory will continue to develop, and new consensuses may therefore emerge.

²³ In the last few years, economists, like Isabella Weber, have reminded policymakers and central bankers that the current understanding of inflation is too narrow. She has argued (and increasingly her argument is being heard by more mainstream orthodox economists) that inflation today, like in the interwar period, seems not to be driven by increases in wages (demand side of the economy), but rather by a rise in the prices fixed by providers of goods (supply side of the economy). See overview of the debate in Z. Carter, ‘What If We’re Thinking About Inflation All Wrong?’ (The New Yorker, 6 June 2023) https://www.newyorker.com/news/persons-of-interest/what-if-were-thinking-about-inflation-all-wrong, visited 25 January 2024.

²⁴ It is regrettable that Tuori does not refer to more recent economic literature, in particular empirical literature, concerning these debates. While some of the secondary literature is fairly recent, the great majority is from 2016 or earlier. In general, it could have been useful to have had an explicit acknowledgement of the cut-off date for the study of the relevant literature and data used.

²⁵ See for example the debate on a European Credit Council: E. Monnet, ‘The Power of Coordination and Deliberation’, Accounting, Economics, and Law: A Convivium (2023); J. van’t Klooster, ‘The Case for a European Credit Council: Historical and Constitutional Fine-Tuning’, Accounting, Economics, and Law: A Convivium (2023).

²⁶ See an overview over literature in Colciago et al., supra n. 3.

²⁷ E. Monnet, ‘The Democratic Challenge of Central Bank Credit Policies’, Accounting, Economics, and Law: A Convivium (2023).

²⁸ See, for example, p. 130, fn. 5; p. 131, fn. 10; p. 138, fn. 43. It might be that some of the numbers are taken from the ECB Statistical Data Warehouse, which is referred to in Figure 5.1 and 5.2, but this is somewhat unclear.

²⁹ At p. 141, 145 and 147 respectively, the terms ‘FCC’ (the German Federal Constitutional Court), ‘PSPP’ (Public Sector Purchase Programme, the Bank’s quantitative easing programme); and ‘QE’ (quantitative easing) are not explained. To the best of my knowledge, this is the first time each of these acronyms appear in the book. The acronyms are, however, explained in the list of acronyms. At p. 114, however, the acronym RTGS is unexplained and does not appear in the acronym list.