"Central bank cooperation during global financial crises has been anything but consistent. While some crises are arrested with extensive cooperation, others are left to spiral. Going beyond explanations based on state power, interests, or resources, Aditi Sahasrabuddhe argues that central bank cooperation—or the lack thereof—often boils down to ties of trust, familiarity, and goodwill between bank leaders. These personal relations influence the likelihood of access to ad hoc, bilateral arrangements with more favorable terms.
Sahasrabuddhe uncovers just how critical interpersonal trust between central bankers has been in managing global financial crises. She tracks the emergence of such relationships in the interwar 1920s, how they helped prop up the Bretton Woods system in the 1960s, and how they prevented the 2008 global financial crisis from turning into another Great Depression.
Sahasrabuddhe challenges the idea that central banking is purely apolitical and technocratic. By calling attention to the influence personal relationships can have on whether countries sink or swim during crises, Bankers' Trust asks us to reconsider the transparency and democratic accountability of global financial governance today."
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