Notenbank und Banken

Abstract

The Central Bank and the Banks The author, who as far back as 1933 in the German bank inquiry strongly advocated the policy of variable minimum reserve rates - then a new instrument of central bank policy - has been prompted by the recent debate on further differentiation of this instrument to reiterate his repeatedly expressed worries concerning present German monetary policy. He answers the question of whether we still'have a meaningfully ordered monetary economy with a clear ‘no’. This answer is derived from Walter Eucken’s thesis that a competitive economy with individual freedom of the consumer, of saving and of investment is capable of functioning only on the basıs of a rigourously, centrally controlled monetary policy. The author is of the opinion that the lack of monetary order leads to progressive destruction of our economic order. Although he has advocated for a long time that the central bank should be given the right to set credit ceilings, he is by no means of the opinion that our monetry system should be made functional again by making the instruments of central bank policy more stringent. On the contrary, the banks, as money-creating institutions, should become conscious of their responsibility for the entire economy and - instead of countering the central bank’s monetary policy - support that policy. A uniform money supply policy could be achieved, asserts Stucken, either by the banks following the central bank’s recommendations or by the central and commercial banks co-operating in monetary and banking policy by way of a gentlemen’s agreement. The instrument of credit ceilings should merely be kept in the background, so to speak, to facilitate attainment of a voluntary consensus. It is the author’s view that such co-operation is the only alternative to very incisive dirigistic solutions - if not nationalization of the banking system.