Keeping global megabanks in business and highly profitable has become a key objective for policymakers in the US, Europe, and many other countries. All too often, however, this means that central bankers defer to these firms’ executives.
WASHINGTON, DC – The banking system has become most central bankers’ Achilles’ heel. This may seem paradoxical – after all, the word “bank” is in their job description. But most people currently at the top of our central banks built their careers during the 1980’s and 1990’s, when the threat of inflation was still very real, so this – rather than bank regulation and supervision – remains a major focus of their intellectual and practical concerns.
WASHINGTON, DC – The banking system has become most central bankers’ Achilles’ heel. This may seem paradoxical – after all, the word “bank” is in their job description. But most people currently at the top of our central banks built their careers during the 1980’s and 1990’s, when the threat of inflation was still very real, so this – rather than bank regulation and supervision – remains a major focus of their intellectual and practical concerns.