Publications
This is a searchable catalogue of the College's most recent books, book chapters, journal articles and working papers. The ANU College of Law also publishes a Research Paper Series on SSRN.
The dysfunctional taboo: monetary financing at the Bank of England, the Federal Reserve, and the European Central Bank
Author(s): Will Bateman, Jens van ‘t Klooster
Monetary financing – the issuance of public money to support public expenditure – remains a widespread policy taboo. In this article, we analyze the operational practices of the Bank of England, the Federal Reserve and the European Central Bank (ECB) from the 20th onwards to argue that monetary finance should be understood as a conventional and legitimate part of central banks’ core functions. We argue that monetary financing serves a crucial macro-financial role in the face of large fluctuations in the demand for and supply of government debt, where the central bank acts to stabilize sovereign debt markets. We show that monetary financing has been a stable and pervasive feature of the Bank of England’s and the Federal Reserve’s operations. Turning to the ECB, we show that by the mid-2000s the view came to dominate the institution that the central bank should allow markets to punish governments for excessive deficits. This view informed the ECB’s catastrophic reluctance to act on the 2008 and 2009 Financial Crisis deficits. By 2020 that attitude had once again largely been abandoned.
Centre: CIPL
Research theme: Administrative Law, Law, Governance and Development, Regulatory Law and Policy
The Law of Central Bank Reserve Creation
Author(s): Will Bateman, Jason Allen
This article explores legal and constitutional dimensions of central banks’ powers to create money, ‘central bank reserves’, through monetary policy operations. Despite the prominence of monetary authority since the Financial Crisis, the law supporting the creation of central bank reserves is very obscure, as is the role of law in structuring constitutional authority over money. We de-mystify those important matters in three steps. First, we explain, for a legal audience, the role of central bank reserves in the financial system and broader economy. Secondly, we analyse the legal basis for the creation of central bank reserves in three prominent ‘North Atlantic’ monetary jurisdictions: the US Dollar, Euro and Sterling systems. Thirdly, we show how the legal structure of central banking intermediates the constitutional state's authority over money through parts of the financial system, focusing on high-profile policy proposals, including ‘QE for the people’, and the creation of central bank digital currencies.
Centre: CIPL
Research theme: Regulatory Law and Policy
The Law of Monetary Finance under Unconventional Monetary Policy
Author(s): Will Bateman
Monetary finance (money creation by central banks to fund public expenditure) is a high-profile part of economic, political and policy debates concerning the legitimacy of central banks in liberal economies and democracies. This article makes a distinctively legal contribution to those debates by analysing the legal frameworks governing monetary finance in three prominent central banking systems between 2008 and 2020: the Federal Reserve System, the Eurosystem and the Bank of England. It begins by explaining the law governing central bank and national treasury relations in the United States, the EU and the UK. It then examines how that law operated under the unconventional monetary policies adopted by central banks in response to the financial crisis and the COVID-19 pandemic. The article concludes by reflecting on the challenges monetary finance presents to the sui generis position of central banks in the liberal constitutional order.
Centre: CIPL
Research theme: Regulatory Law and Policy
Public Finance and Parliamentary Constitutionalism
Author(s): Will Bateman
Public Finance and Parliamentary Constitutionalism analyses constitutionalism and public finance (tax, expenditure, audit, sovereign borrowing and monetary finance) in Anglophone parliamentary systems of government. The book surveys the history of public finance law in the UK, its export throughout the British Empire, and its entrenchment in Commonwealth constitutions. It explains how modern constitutionalism was shaped by the financial impact of warfare, welfare-state programs and the growth of central banking. It then provides a case study analysis of the impact of economic condition on governments' financial behaviour, focusing on the UK's and Australia's responses to the financial crisis, and the judiciary's position vis-à-vis the state's financial powers. Throughout, it questions orthodox accounts of financial constitutionalism (particularly the views of A. V. Dicey) and the democratic legitimacy of public finance. Currently ignored aspects of government behaviour are analysed in-depth, particularly the constitutional role of central banks and sovereign debt markets.
> Provides the first constitutional analysis of public finance law and practice in UK and Commonwealth jurisdictions
> Provides an historical treatment of legal and constitutional dimensions of public finance in British and Commonwealth jurisdictions
> Accessibly explains how government, law and economic conditions interact before, during and after moments of economic crisis, using the UK and Australia as examples
Centre: CIPL
Research theme: Administrative Law, Constitutional Law and Theory, Law and Technology, Regulatory Law and Policy
Central Bank Money: Liability, Asset, or Equity of the Nation?
Author(s): Will Bateman, Michael Kumhof, Jason G Allen, Rosa M. Lastra, Simon Gleeson, Saule T. Omarova
Based on legal arguments, we advocate a conceptual and normative shift in our understanding of the economic character of central bank money (CBM). The widespread treatment of CBM as a central bank liability goes back to the gold standard, and uses analogies with commercial bank balance sheets. However, CBM is sui generis and legally not comparable to commercial bank money. Furthermore, in modern economies, CBM holders cannot demand repayment of CBM in anything other than CBM. CBM is not an asset of central banks either, and it is not central bank shareholder equity because it does not confer the same ownership rights as regular shareholder equity. Based on comparisons across a number of legal characteristics of financial instruments, we suggest that an appropriate characterization of CBM is as ‘social equity’ that confers rights of participation in the economy’s payment system and thereby its economy. This interpretation is important for macroeconomic policy in light of quantitative easing and potential future issuance of central bank digital currency (CBDC). It suggests that in robust economies with credible monetary institutions, and where demand for CBM is sufficiently and sustainably high, large-scale issuance such as under CBDC is not inflationary, and it does not weaken public sector finances.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3730608
Centre: CIPL
Research theme: Regulatory Law and Policy
Algorithmic Decision-Making and Legality: Public Law Dimensions
Author(s): Will Bateman
Automating the exercise of statutory powers through algorithmic decision-making carries high levels of legal risk. Fundamental public law doctrines assume that legal powers will be exercised by a particular kind of decision-making agent: one with sufficient cognitive capacities to understand the interpretative complexity of legal instruments and respond to highly dynamic environments. Public law doctrines also assume that clear reasons can be given for the exercise of public power and, by default, attribute legal responsibility for the exercise of statutory powers to a human being bearing political and social responsibility. Those doctrines provide the standards against which the legality of algorithmic decision-making in the public sector must be tested and, until they are met, lawyers should be sceptical of suggestions that statutory powers can be automated.
Centre: CIPL
Research theme: Administrative Law, Constitutional Law and Theory, Law and Technology, Regulatory Law and Policy
Chapter III of the Constitution, Federal Jurisdiction and Dialogue Charters of Human Rights
Author(s): Will Bateman, James Stellios
The High Court’s decision in Momcilovic v The Queen is the first to consider the compatibility of the Charter of Human Rights and Responsibilities 2006 (Vic) with ch III of the Constitution. The decision will have significant implications for the continuing effectiveness of key provisions of the Charter, the Human Rights Act 2004 (ACT) and any future federal charter of human rights. This article analyses the decision and evaluates its implications for the dialogue model of statutory human rights protection in Australia. It also considers several controversial statements concerning the principles of federal jurisdiction that arise from the decision.
Centre: CIPL
Research theme: Administrative Law, Constitutional Law and Theory, International Law, Law and Technology, Regulatory Law and Policy
