A Sociological Take on Central Banks Innovation

Since 2008, central bankers have been at the centre of important institutional changes, especially in developed capitalist economies. They have adopted strong monetary plans to face the intensification of the financial crisis, have created new tools of monetary policy aiming at restoring the confidence in the banking system and in the financial markets, have implemented various types of “quantitative easing” or “unconventional policies” to fight the risks of depression or deflation. Since 2008, we have also seen the generalisation of very low interest policies, which were before that merely seen as a very particular strategy undertaken by the Japanese central bank to face deflation. Signals of remaining low interest rates in the future are part of this change. All these changes in monetary policy have profoundly modified the conditions of action of central banks, and have strongly affected the daily functioning of financial markets. Some of them can be described as “innovations”, in the sense that they at least partially contradict classical conceptions prevailing in the domain of monetary policy, and consist in new sets of institutional tools. This article aims at analysing the complex web of social factors behind central bank’s innovation in times of global crisis. The general question it raises is: what makes central bank innovations possible and, in some cases, impossible or difficult? We therefore take a particular look at the European Central Bank, which has been at the centre of various stakes and struggles as regards the limits of innovation.