Social Responsibility in the Operation of Central Banks

29 June 2017DOI: https://doi.org/10.25201/FER.16.2.6485

Author information:

Csaba Lentner: National University of Public Service, Professor and Head of Department. E-mail:

Krisztina Szegedi: University of Miskolc, Associate Professor. E-mail:

Tibor Tatay: Széchenyi István University, Associate Professor. E-mail:

Abstract:

In our study, we set out from the hypothesis that the social responsibility of central banks is peculiar, since these were established decidedly for the benefit of the common good. For the interpretation of their social responsibility, we first examine the concept of corporate social responsibility (CSR) in corporate practice. After this, we transpose the interpretation of CSR, applied to the operation of central banks. We interpret the concept of economic, legal, ethical and philanthropic responsibility in connection with the activity of central banks. Using examples, we shed light on how we specifically interpret the individual components of corporate social responsibility in the central bank practice, via the activity of the Magyar Nemzeti Bank, the US Federal Reserve, the European Central Bank, and the central banks of the Netherlands, Denmark, Spain, Poland and the Czech Republic.

Cite as (APA):

Lentner, C., Szegedi, K., & Tatay, T. (2017). Social Responsibility in the Operation of Central Banks. Financial and Economic Review, 16(2), 64–85. https://doi.org/10.25201/FER.16.2.6485

PDF download
The works on this site are licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Column:

Study

Journal of Economic Literature (JEL) codes:

M14, E58 E44, G28

Keywords:

corporate social responsibility, CSR, central bank, public awareness, financial stability, business ethics, central bank

References:

Ábel, I. – Csortos, O. – Lehmann, K. – Madarász, A. – Szalai, Z. (2014): Inflation targeting in the light of lessons from the financial crisis. Financial and Economic Review. November: 35–56.

Ábel, I. – Lehmann, K. – Tapaszti, A. (2016): Controversial handling of money and banks in macroeconomics. Financial and Economic Review, 15(2): 33–58.

Akerlof, G. – Schiller, R. (2011): Animal spirits. Corvina, Budapest.

Banco de España (2017b): Transparency. http://www.bde.es/bde/en/secciones/sobreelbanco/Transparencia/. Downloaded: 01 March 2017.

Banco de España (2017b): Cultural and social work. http://www.bde.es/bde/en/secciones/sobreelbanco/Transparencia/Informacion_econ/Atenciones_benef/Atenciones_cult_21239a5c48b0a41.html. Downloaded: 01 March 2017.

Biedermann, Zs. (2012): History of American financial regulation. Pénzügyi Szemle 3: 337–354.

Board of Governors of the Fed (2014): Community Development. http://www.Federalreserve.gov/communitydev/default.htm. Downloaded: 13 December 2014.

Braun, B. (2016): Speaking to the people? Money, trust, and central bank legitimacy in the age of quantitative easing. Review of International Political Economy, Volume 23: 1064–1092. https://doi.org/10.1080/09692290.2016.1252415.

Carroll, A.B. (1979): A Three-Dimensional Model of Corporate Performance. Academy of Management Review, Vol. 4., No. 4: 497–505. https://doi.org/10.2307/257850.

Carroll, A.B. (1991): The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders. Business Horizons, July-August.

Carroll, A.B. (2015a): The State of CSR in 2015 and Beyond. In: Global Compact (2015) Global Compact International Yearbook 2015. Macondo Publishing GmbH: 10–13.

Carroll, A.B. (2015b): Corporate social responsibility: The centerpiece of competing and complementary frameworks. Organizational Dynamics, 44: 87–96. https://doi.org/10.1016/j.orgdyn.2015.02.002.

Carroll, A.B., – Shabana, K.M. (2010): The business case for corporate social responsibility: A review of concepts, research and practice. International Journal of Management Reviews, 12(1): 85–105.

Chikán, A. (2003): Business economics. Aula Kiadó, Budapest.

Csiszárik-Kocsir, Á. – Szigeti, C. (2015): Financial culture of youth in Hungary. In: Kratochvíl, R. – Vopava, J. – Douda, V. (ed.): Proceedings of the 4th MAC 2015. Prague, Czech Republic, 20.02.2015-21.02.2015 Prague. MAC Prague consulting.

Csortos, O. – Lehmann, K. – Szalai, Z. (2014): Theoretical considerations and practical experiences of forward guidance. MNB Bulletin, July 2014, pp. 45–55.

Czech National Bank (2017): Consumer protection. http://www.cnb.cz/en/consumer/index.html. Downloaded: 01 March 2017.

Dalhsrud, A. (2008): How corporate social responsibility is defined: an analysis of 37 definitions. Corporate Social Responsibility and Environmental Management, 15(1): 1–13. https://doi.org/10.1002/csr.132.

Danmarks Nationalbank (2017a): Careers at Danmarks Nationalbank. http://www.nationalbanken.dk/en/career/Pages/Default.aspx. Downloaded: 01 March 2017.

Danmarks Nationalbank (2017b): Danmarks Nationalbank and economic research. http://www.nationalbanken.dk/en/about_danmarks_nationalbank/DN_and_economic_research/Pages/default.aspx. Downloaded: 01 March 2017.

De Nederlandsche Bank (2017): Corporate Social Responsibility. https://www.dnb.nl/en/about-dnb/organisation/maatschappelijk-verantwoord-ondernemen/index.jsp. Downloaded: 01 March 2017.

De Nederlandsche Bank (2016): Central Banks Keep Finger on Money Creation Pulse. DNBulletin 19 August; accessed at http://www.dnb.nl/en/news/news-and-archive/dnbulletin-2015/dnb325255.jsp, 3 September 2016.

Dodd, E.M. Jr. (1932): For Whom are Corporate Managers Trustees? Harvard Law Review 45(7): 1145–1163. https://doi.org/10.2307/1331697.

Dodd-Frank Act (2010): https://www.sec.gov/about/laws/wallstreetreform-cpa.pdf. Downloaded: 14 December 2014.

ECB (2002): Code of Conduct for the Members of the Governing Council. https://www.ecb.europa.eu/ecb/legal/pdf/hu_mou_on_code_of_conduct_consolidated_f.pdf. Downloaded: 14 December 2014.

ECB (2011): Part of the conditions of employment of the personnel of the ECB containing the ethical framework system. https://www.ecb.europa.eu/ecb/legal/pdf/c_04020110209hu00130017.pdf. Downloaded: 14 December 2014.

ECB (2012): Protocol about the Statute of the European System of Central Banks and the European Central Bank. Official Journal of the European Union, 26.10.2012 https://www.ecb.europa.eu/ecb/legal/pdf/c_32620121026hu_protocol_4.pdf. Downloaded: 14 December 2014.

ECB (2014a): Mission of the European Central Bank. https://www.ecb.europa.eu/ecb/orga/escb/ecb-mission/html/index.hu.html. Downloaded: 12 November 2014.

ECB (2014b): Popular materials. https://www.ecb.europa.eu/ecb/educational/html/index.hu.html. Downloaded: 14 December 2014.

ECB (2015): Single Supervisory Mechanism. https://www.bankingsupervision.europa.eu/about/thessm/html/index.hu.html. Downloaded: 05 January 2015.

ECB (2017): Resolution No. 2017/103 of the European Central Bank. https://www.ecb.europa.eu/ecb/legal/pdf/celex_32017d0004_hu_txt.pdf. Downloaded: 20 February 2017.

Evan, W.M. – Freeman, R.E. (1996): Stakeholder theory of the modern enterprise: Kantian capitalism. In: Boda, Zs. – Radácsi, L. (1996): Corporate ethics. BKE Vezetőképző Intézet, Budapest: 93–108.

Federal Reserve Bank (2014): Annual Performance Plan. http://www.federalreserve.gov/publications/gpra/files/2014-gpra-performance-plan.pdf. Downloaded: 10 December 2014.

Federal Reserve Bank of Chicago (2016): Corporate Social Responsibility. https://www.chicagoFed.org/utilities/about-us/csr/index. Downloaded: 10 December 2016.

Federal Reserve Bank of Minneapolis (2014): Community Involvement. https://www.minneapolisfed.org/about/careers/community-involvement. Downloaded: 14 December 2014.

Federal Reserve Bank of New York (2014): Community Involvement. http://www.newyorkfed.org/careers/comminvolve.html. Downloaded: 14 December 2014.

Jakab, Z. – Kumhof, M. (2015): Banks are not intermediaries of loanable funds – and why it matters. Bank of England Working Paper, No. 529. https://doi.org/10.2139/ssrn.2612050.

Kahn, A. (2016): Central Bank Governance and the Role of Nonfinancial Risk Management. IMF Working Paper. February 2016. https://doi.org/10.5089/9781498376051.001.

Kecskés, A. – Halász, V. (2013): Stock Corporations: A Guide to Initial Public Offerings, Corporate Governance and Hostile Takeovers. HVG-ORAC – LexisNexis, Budapest-Vienna, p. 191.

Kerekes, S. (2009): Foundations of environmental economics. Aula Kiadó.

Kolozsi, P.P. – Hoffmann, M. (2016): Reduction of external vulnerability with monetary policy tools. Pénzügyi Szemle 2016/1: 9–34.

Kril, Z. – Leiser, D. – Spivak, A. (2016): What Determines the Credibility of the Central Bank of Israel in the Public Eye? The International Journal of Central Banking, March 2016. http://www.ijcb.org/journal/ijcb16q1a3.pdf. Downloaded: 10 December 2016.

Kovács, L. (2015): Research of financial culture and our current tasks. Economy and Finance, Volume 2: pp. 79–88.

Kurucz, E. – Colbert, B. – Wheeler, D. (2008): The business case for corporate social responsibility. In: A. Crane, A. McWilliams, D. Matten, J. Moon, & D. Siegel (eds.), The Oxford handbook of corporate social responsibility. Oxford University Press: 83–112.

Lagarde, C. (2014): Economic Inclusion and Financial Integrity—an Address to the Conference on Inclusive Capitalism. https://www.imf.org/external/np/speeches/2014/052714.htm. Downloaded: 07 December 2014.

Lentner, Cs. – Szegedi, K. – Tatay, T. (2015): Social responsibility of central banks. Vezetéstudomány, 46(9-10): 35–47.

Margolis, J.D. – Elfenbein, H.A. – Walsh, J.P. (2009): Does it Pay to Be Good...And Does it Matter? A Meta-Analysis of the Relationship between Corporate Social and Financial Performance. (March 1). http://dx.doi.org/10.2139/ssrn.1866371.

Matolcsy, Gy. (2015): Balance and growth. KAIROSZ Könyvkiadó, Budapest, p. 644.

MNB (2014): Independence and Responsibility. Statute of the Magyar Nemzeti Bank, May. https://www.mnb.hu/letoltes/a-magyar-nemzeti-bank-alapokmanya-1.pdf. Downloaded: 13 December 2014.

MNB (2014): Social responsibility strategy of the Magyar Nemzeti Bank. https://www.mnb.hu/letoltes/mnb-tarsadalmi-spread-low-1.pdf. Downloaded: 11 December 2016.

MNB Act (2013): Act on the Magyar Nemzeti Bank (2013). https://www.mnb.hu/a-jegybank/kozerdeku-adatok/tevekenysegre-mukodesre-vonatkozo-adatok/a-szerv-alaptevekenysege-feladata-es-hataskore/jegybanktorveny. Downloaded: 14 December 2014.

Naszódi, A. – Csávás, Cs. – Erhart, Sz. – Felcser, D. (2016): Which Aspects of Central Bank Transparency Matter? A Comprehensive Analysis of the Effect of Transparency of Survey Forecasts. The International Journal of Central Banking, December 2016. http://www.ijcb.org/journal/ijcb16q4a4.pdf. Downloaded: 11 December 2016.

Neményi, J. (2012): Effect of the financial crisis on the regulation of central banks. Competition and regulation. MTA KRTK Közgazdaság-tudományi Intézet. May: 167–219.

Narodowy Bank Polski (2017): Research & Conferences. http://www.nbp.pl/homen.aspx?f=/badania/konferencje_en.htm. Downloaded: 01 March 2017.

Obama, B. (2009): Remarks by the President on 21st Century Financial Regulatory Reform. The White House Office of the Press Secretary, June 17, 2009.

Pesuth, T. (2016): Redefining the role of the central bank. Pénzügyi Szemle, 2016/1 pp. 35–49.

Rangan, V.K. – Chase, L. – Karim, S. (2015): The Truth About CSR. Harvard Business Review, January–February: 40–49.

Sági, J. (2010): Discretionality of Monetary Policy. In: Radványi, T. (ed.) Money and society: Essays from the scientific workshop of the Financial and Accounting Department of the Budapest Business School. Budapest: Financial and Accounting Department of the Budapest Business School: 59–62.

Shirakawa, M. (2010): Revisiting the philosophy behind central bank policy. Speech by Mr Masaaki Shirakawa, Governor of the Bank of Japan, at the Economic Club of New York, New York, 22 April. http://www.bis.org/review/r100427b.pdf. Downloaded: 10 December 2016.

Schoen, E.J. (2016): The 2007–2009 Financial Crisis: An Erosion of Ethics: A Case Study. Journal of Business Ethics, February.

Smith, A. (1759): The Theory of Moral Sentiments. http://www.ibiblio.org/ml/libri/s/SmithA_MoralSentiments_p.pdf. Downloaded: 11 April 2012.

Sunstein, R.C. – Thaler, R.H. (2011): Nudge. Better decisions about health, money and happiness – after the financial crisis. Budapest, Manager Könyvkiadó és Könyvkereskedő Kft, p. 264.

Szczerbowicz, U. (2015): The ECB Unconventional Monetary Policies: Have They Lowered Market Borrowing Costs for Banks and Governments? The International Journal of Central Banking, December 2015. http://www.ijcb.org/journal/ijcb15q5a3.pdf. Downloaded: 11 December 2016.

Szegedi, K. (2014): Possibilities of Corporate Social Responsibility. In: Berényi, L. (Ed.) (2014): Management Challenges in the 21st Century. LAP LAMBERT Academic Publishing.

Székely, A. (2012): Regulatory response steps to the crisis in the United States. Financial and Economic Review, 3: 230–253. http://www.bankszovetseg.hu/wp-content/uploads/2012/10/230-253-szekely1.pdf. Downloaded: 13 December 2012.

Trichet, J.C. (2010): Central banking in uncertain times: conviction and responsibility. Speech by Jean-Claude Trichet, President of the ECB, at the symposium on “Macroeconomic challenges: the decade ahead”, Jackson Hole, Wyoming, 27 August 2010. http://www.ecb.europa.eu/press/key/date/2010/html/sp100827.en.html. Downloaded: 10 December 2014.

Yellen, J.L. (2014): Remarks at the Panel Discussion on “Shaping the Future of the Macroeconomic Policy Mix” At the “Central Banking: The Way Forward?”, International Symposium of the Banque de France, Paris, France, November 7. http://www.federalreserve.gov/newsevents/speech/yellen20141107a.htm. Downloaded: 07 December 2014.