Central bank intervention European banks Global Economy

Is Europe over (central)banked? 

Source: Financial Times https://ftalphaville.ft.com/2020/02/23/1582479286000/Is-Europe-over--central-banked--/

February 24 2020

By: Claire Jones

Christine Lagarde, one among 48,500.  © PATRICK SEEGER/EPA-EFE/Shutterstock

The Economist has a little article in this week’s edition querying the vast staff counts employed at Europe’s central banks – that’s the European Central Bank as well as the national central banks of the nation states that use the single currency. Via its website:

Many national central banks in the euro area have shed staff in the two decades since they ceded many of their responsibilities to the ECB. Yet they still look flabby: the central banks of Germany, France and Italy have many more employees than the Bank of England, whose duties have grown over the same period.

The size of some of the national central banks, more than 21 years on from the euro’s introduction, is staggering. Here are the figures, put together by Central Banking Publications, a trade journal:

The French and Germans have central banks that are more than double the size of the Bank of England (4,502) and the Bank of Japan (4,636), despite having similar-sized economies.

The Economist then points out that the US central bank is an even bigger operation than any of Europe’s national central banks. But we don’t agree with the article’s insinuation that it’s a less efficient set-up.
The Federal Reserve in Washington and the 12 regional Feds dotted around the country do employ more than 21,000 (again, the figures are from Central Banking Publications):

But that’s less than half the 48,500 that work for central banks managing the euro. And the Fed is in charge of the world’s most important currency, represents a bigger economy, while its population is only marginally smaller.
The numbers in Europe have, it must be said, fallen back, often through painful closures of local central banks – the Banque de France, for instance, has gone from having 211 branches dotted around the country to 95 today. But still, that’s a lot more than the 12 agencies the BoE has.
Europe’s central banks, forever calling on member states to make painful structural reforms to their economies, might want to take a closer look inside their own corridors.