Friday, 25 May 2018 20:46 WIB |
FISCAL & MONETARY |The Fed
Federal Reserve Chairman Jerome Powell said central banks shouldn't take their independence for granted at a time when trust in public institutions is at "historic lows," requiring extra effort to explain both their monetary and regulatory policies.
"This is a challenging moment for central banking," Powell said in the text of a speech prepared for delivery Friday in Stockholm. It is "critically important to provide transparency and accountability."
Declaring "there can be no macroeconomic stability without financial stability," Powell spent much of his speech discussing regulatory and supervisory policies without commenting on the Fed™s monetary stance or his economic outlook.
"In the financial stability realm, the case for enhanced transparency is not just about being accountable; it is also about providing credible information that can help restore and sustain public confidence in the financial system," he said. Powell was appearing on a panel at a Riksbank conference with the Bank of England Governor Mark Carney, European Central Bank Executive Board member Benoit Coeure, and Agustin Carstens of the Bank for International Settlements.
Powell's remarks come against the backdrop of a global populist backlash that contributed to the election victory of U.S. President Donald Trump and has most recently propelled a euro-skeptic coalition to power in Italy.
Powell also addressed the topic of central bank independence, warning that its absence in the past has led to episodes of runaway inflation. It also, he said, imposed responsibilities on central bankers to stick to their legal mandates.
Source : Bloomberg