Analysis: Central banking’s brave new world

The ambition of central bankers once was to ‘be boring’ but they now take on responsibility for policy objectives such as tackling inequality and climate change. Not all onlookers are pleased at this ‘self-defined mission creep’

Jean Pisani-Ferry

24th February, 2021

Analysis: Central banking’s brave new world

‘It is no accident that both the Fed and the ECB are venturing into new terrain. With inflation having vanished, at least temporarily, neither institution wants to be the high priest of a forgotten deity.’ Picture: Getty

Twenty years ago, central bankers were proudly narrow-minded and conservative. They made a virtue of caring more about inflation than about the average citizen, and took great pains to be obsessively repetitive. As future Bank of England (BOE) governor Mervyn King said in 2000, their ambition was to be boring.

The 2008 financial crisis abruptly dashed that objective. Ever since, central bankers have been busy developing new policy instruments to fight fires and ward off emerging...

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