Independence without purpose? Macroprudential regulation at the Bundesbank

Abstract It is commonly assumed that state agencies legitimize themselves via outputs. This paper shows that in situations of organizational crisis, state agencies may adopt new policy areas symbolically to compensate for lost legitimacy. Drawing on an ethnography within the Bundesbank, internal documents, and insider interviews, I trace how the German Bundesbank adopted financial stability as a policy area to compensate for the loss of monetary policy and banking supervision in the early 2000s. By focusing on the relationship between internal organizational struggles over the Bundesbank’s identity and the boundary work it has to conduct to establish its new role, I show that the Bundesbank failed to shift the state-economy boundary post-crisis in its effort to regain its position as autonomous purveyor of macroeconomic governance.