Archive for the ‘European Central Bank’ Category
Ben Bernanke’s reappointment: The very model of a modern central banker
The original article is linked here.
GREG IP
From The Economist print edition
An academic background stood the chairman of the Federal Reserve in good stead during his first term. Political skills may be more important in his second
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AS THE financial crisis gathered force in August 2007, Jim Cramer, a hyperbolic market commentator on cable television, hurled the worst epithet he could muster at the chairman of the Federal Reserve: “Bernanke is being an academic. It is no time to be an academic!” By August 25th this year, when Barack Obama nominated Ben Bernanke to a second, four-year term, what had once been an epithet had become a source of strength. Read the rest of this entry »
Central banks:The monetary-policy maze
The original story is linked here.
From The Economist print edition
The simple rules by which central banks lived have crumbled. A messier, more political future awaits
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IN THE world that existed before the financial crisis, central bankers were triumphant. They had defeated inflation and tamed the business cycle. And they had developed a powerful intellectual consensus on how to do their job, summarised recently by David Blanchflower, a member of the Bank of England’s monetary policy committee, as “one tool, one target”. The tool was the short-term interest rate, the target was price stability.
This minimalist formula fitted the laissez-faire temper of the times. A growing array of financial markets could price risk and allocate credit efficiently. Central bankers had merely to calibrate their interest-rate tools and all other markets would automatically adjust. Central banks still cared about financial stability and full employment, but could argue these were best served by stabilising prices—without, if you please, interference from politicians.
The financial crisis has upended all that. Read the rest of this entry »
