Central Bank Confidential

Central Banks on the Offensive?

The Wrong War for Central Banking

The Temptation of the Central Bankers

Big Banks Shadow Dance

Central Banking s New Club Class

Central Bankers under Siege

Central Banks Outdated Independence

The Secret Language of Central Bankers

Do Central Banks Have an Exit Strategy?

The Uncertain Future of Central Bank Supremacy

Central Bankers on the Ground

The timekeepers are central banks.

Independent central banks are the archetypal example.

Certainly central banks have played a critical role. But central banks have stated that they do not have the policy instruments to accelerate the pace of economic recovery.

In the end, both have to be bailed out by central banks.

(And don t think central banks have ruled out the inflation tax.

Of course, not all central bankers are to blame.

Central bank inflation targets are now normally set at 2 .

Central bank independence is a peculiar institutional innovation.

In normal times, central banks want to reduce inflation.

So, what should Western central banks do?

When banks stopped providing short term liquidity to other banks and industrial companies, central banks filled the gap.

Autonomous interest rate determination would penalize banks that have borrowed in southern Europe from their national central banks.

If rich country central banks can buy long term bonds, then emerging country central banks can buy dollar denominated bonds.

This has triggered a search for a radical redefinition of central banks objectives and has cast doubt on the appropriateness of maintaining their independence.

The European Union wants to establish a European Systemic Risk Board composed of the national central bank governors, chaired by the European Central Bank.

Can Central Banks Still Influence Exchange Rates?

Apart from China, central banks don t intervene to protect their currencies anymore.

But central banks cannot do it alone.

Traditionally, central banks remove the punch bowl once the party stops.

As a result, central banks failed to see the oncoming financial tsunami, and even after it arrived they continued to fight the last war against inflation.

Finally, central banks still stand ready to intervene to prevent bank runs.

Foreign bank mergers have proved poisonous for euro zone central bankers.

It remains to be seen how willing the ECB will be to provide national central banks with the volume of euros needed to play this role fully.

This episode serves as a reminder that central banks are political institutions, with a political agenda, and that independent central banks tend to be captured (at least cognitively ) by the banks that they are supposed to regulate.

With most shocks to the world economy, we expect central banks to take steps to offset their effects.

Across the board, the world s major central banks have been slow to respond to the deepening crisis.

Central banks in Asia and the Middle East have traditionally held their reserves in dollars.

Thatcher was certainly no friend of central bankers.

They take pride in the expert management of expectations by central banks.

Central bankers have done everything in their power to finesse these problems.

Most developed countries have concluded that central bank independence makes good sense.

Improved central bank policy is another huge factor.

NEW HAVEN The politicization of central banking continues unabated.