Too political to delegate? Financial stability and the politics of depoliticization

This article argues that many of the most discussed strategies of central bank depoliticization no longer work in relation to their new post-crisis financial stability mandates. Central banks therefore had to come up with a set of new strategies of denial, reduction, boundary work, the creation of satellite issues, and the adoption of a one-tool-one-goal paradigm for this policy area. While these mechanisms have so far been largely successful in keeping politicization at bay, it will be shown that each strategy creates its own contradictions and fragilities, which might yet prove self-undermining. Most importantly, attempts by central bankers to reduce the number of goals and tradeoffs considered in the calibration of financial stability policies constantly run up against a broader understanding of relevant social goals invoked by other actors in the policy space. To demonstrate this, the article traces several key macroprudential policy initiatives in Germany and the UK.