Central Banks Came to the Rescue During the Financial Crisis – But Were They Also to Blame For It?
Before the crisis of 2007-08, the general public rarely considered central banks and that was the way central bankers liked it. The less they were in the headlines, the better: if the global economy was working well enough to be considered boring, they were doing their job.
Then the banking system collapsed and the central banks had to come out of the shadows. Never were the words of central bankers such as Ben Bernanke and Mervyn King more eagerly scanned. They became financial physicians, applying quantitative easing here, cash injections there and radical surgery for the parts that couldn’t be saved.
Afterwards, reflection set in. The central banks had clearly played a major role in resolving the crisis — but had they also been responsible for causing it? Was their medicine effective or did it produce unforeseen side-effects? Are they really independent or have politicians and vested interests captured them? These are some of the questions addressed in three new books.