During the growth years, it became fashionable for politicians to claim that central banks were “independent”. But as the current crisis has grown, this has been increasingly exposed as a myth.
As the blog noted back in September 2007, Alan Greenspan (former US Federal Reserve Chairman), revealed that ‘the presumption that we were fully independent and have full discretion was false’.
Now Germany’s Chancellor, Angela Merkel, has gone one step further. Speaking in Berlin, she made a remarkable attack on current central bank policies. “What other central banks have been doing must be reversed. I am very sceptical about the extent of the Fed’s actions and the way the Bank of England has carved its own little line in Europe. Even the European Central Bank (ECB) has somewhat bowed to international pressure with its purchase of covered bonds.”
In other words, the ECB should do what the politicians tell it to do, not what it thinks is the right policy. The blog will watch to see if it now begins to retreat on recent initiatives, even at the cost of breaking central bank unity as the current crisis deepens.
- Our work
- REPORTS
- The pH ReportMonthly focus on what is driving the global economy
- NewsletterWeekly spotlight on a key issue impacting the global economy
- New Normal eBookBoom, Gloom and the New Normal: How the Western Babyboomers are Changing Demand Patterns, Again
- White PaperA Roadmap for the Global Energy Sector – IEA May 2021 report synopsis
- White PaperRenewable Carbon for Chemicals and Derived Materials – Nova-Institute April 2021 report synopsis
- REPORTS
- About us