Can central bankers live up to their role as the guardians of finance?
Central bankrs need to be the risk managers of the financial system
It is an occupational hazard. Central bankers believe, with a mix of wishful thinking and empirical evidence, that their own credibility is critical to the success of monetary policy.1 There is little room, then, for exhibiting self-doubt, with a tendency for new policies to be grasped with gusto and the old to be quickly discarded. It is not that critical thinking is actively discouraged – central bankers are a conscientious lot. But in practice it is disincentivised. An idea or analysis that
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