Just when inflation seemed to finally be cooling, high interest rates claimed their first major victim: Silicon Valley Bank. And yet, central banks around the world claim the job is not finished, and more needs to be done to curb runaway inflation. But for some economists and business insiders, the latest debacle confirms a long held belief that central banks have largely failed as public institutions.  Their supposed neutrality is a farce, and they are inherently political bodies run by unelected officials. Democracy requires more than accountability, transparency, and good deliberation. It requires democratic power: the power of the people and their elected officials to steer policy. They argue central banks are in desperate need of transformation to better serve the economy and the public.  But others argue that the central bank has largely succeeded at seeing the global economy through turbulent times over many decades.  The fact that central bankers play an important role in society, but are unelected, does not mean that central banks by their very nature are inherently democratic.  And while some minor reforms may be warranted, central banks have been and remain one of the most resilient and effective public bodies. 

Arguing for the motion is Thomas Palley, the former Assistant Director of Public Policy at the AFL-CIO.

Arguing against the motion is Steve Kamin, Senior Fellow at the American Enterprise Institute, where he studies international macroeconomics and monetary policy.

The host of the Munk Debates is Rudyard Griffiths - @rudyardg.  

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Editor: Kieran Lynch