By Michael Sauga and Anne Seith
Der Spiegel, Hamburg, Germany
Wednesday, April 16, 2014
Since the financial
crisis, central banks have slashed interest rates, purchased vast quantities
of sovereign bonds, and bailed out banks. Now, though, their influence
appears to be on the wane with measures producing paltry results. Do they
still have control?
Once every six weeks, the
most powerful players in the global economy meet on the 18th floor of an ugly
office building near the train station in the Swiss city of Basel. The group
includes United States Federal Reserve Chair Janet Yellen
and her counterpart at the European Central Bank, Mario Draghi,
along with 16 other top monetary policy officials from Beijing, Frankfurt,
Paris, and elsewhere.
The attendees spend
almost two hours exchanging views in a debate chaired by Bank of Mexico
Governor Agust�n Carstens.
Waiters serve an exquisite meal and expensive wine as the central bankers
talk about the economy, growth and market prices. No one keeps minutes, but
the world's most influential money managers are convinced that the meetings
help expand their knowledge in important ways. "We learn what makes our
counterparts tick," says one attendee.
These closed-door meetings, which are held on Sunday
evenings, have a long tradition. But ever since many central banks lowered
their interest rates to almost zero, bought up sovereign debt and rescued
banks, a new, critical undertone has crept into the dinner conversations.
Monetary experts from emerging economies complain that the measures taken by
Europeans and Americans are pushing unwanted speculative money their way.
Western central bankers say they have come under growing political pressure.
And recently, when the host of the meetings -- head of the Basel-based Bank
for International Settlements Jaime Caruana --
speaks in one of his rare public appearances, he talks about "chronic
post-crisis weakness" and "risk." Monetary institutions, says Caruana, are at "serious risk of exhausting the
policy room for manoeuver over time."
These are unusual words,
especially now that the world's central bankers, five years after the Lehman
crash, are more powerful than ever. They set interest rates and control the
money supply, oversee governments and banks and, like Bank of England
Governor Mark Carney, are treated a bit like movie stars by the public. ...
... For the full
story:
http://www.spiegel.de/international/business/central-banks-ability-to-in...
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