This paper examines central bank independence with reference to the constraints on central bank credit to the government, focusing on how such credit should be regulated. It discusses why credit should be contsrained, and in which forms, and how to implement those constraints

The renewed interest in the theory of the lender of last resort (LOLR) as well as the missing LOLR in the Eurosystem has triggered a new thesis on the LOLR: not the central bank but the Minister of Finance is the true LOLR. The classical theorists of central banking – Steuart, Thornton,...

1. Regulatory reasons for the crisis 2. Refinancing credit and Target balances 2.1 Target balances 2.2 Target balances and fiscal rescue credit 2.3 The lowering of collateral standards for refinancing credit 2.4 Indirect state financing via refinancing credit to commercial banks 3. ECB...

The renewed interest in the theory of the lender of last resort (LOLR) as well as the missing LOLR in the Eurosystem has triggered a new thesis on the LOLR: not the central bank but the Minister of Finance is the true LOLR. The classical theorists of central banking - Steuart, Thornton, Bagehot...

1. Regulatory reasons for the crisis <br>2. Refinancing credit and Target balances <br>2.1 Target balances <br>2.2 Target balances and fiscal rescue credit <br>2.3 The lowering of collateral standards for refinancing credit <br>2.4 Indirect state financing via refinancing credit to commercial banks <br>3. ECB...