A Review by Andrew Sheng
Central banking used to be an august profession – highly respected, almost reverred, mainly because they looked after everybody’s money.
But now that Wall Street can rake in more money than God, and the Fed and European Central Bank are still printing money to keep their economies from deflating, central bankers have lost their god-like status.
Every year in August, the Federal Reserve Bank of Kansas hosts an event in Jackson Hole for central bankers and key thinkers on money to debate the international economy. In the 2005 Jackson Hole event, then IMF economic counsellor Rajan Raguram asked the question: “Has financial development made the world riskier?” and was famously dismissed by the august central banking community present, including Larry Summers, then US Treasury secretary, who called the question “mildly Luddite”. In case you don’t know what that means, the Luddites were those who resisted the Industrial Revolution.
his year, in the midst of one of the most uncertain summers on record and the uncertain direction of the international economy, with Super Mario seemingly alone staving off the barbarians at the European debt gate, the Jackson Hole conference will be held in September, so we do not have the benefit of the wisdom of the central banking community to prepare us for the second half of the year.
Andrew L.T. Sheng is the third holder of the prestigious Tun Ismail Ali Chair at the Faculty of Economics and Administration, University of Malaya.
He became the Deputy Chief Executive of the Hong Kong Monetary Authority from 1993 to 1998, responsible for the Reserves Management and External Departments. From October 1998 to September 2005, Andrew Sheng was the Chairman of the Hong Kong Securities and Futures Commission. Andrew Sheng has published widely in monetary and financial issues. In 1998, he co-chaired the Working Party on Transparency and Accountability, one of the three Working Parties formed under the Group of Twenty-two Finance Ministers and Central Bank Governors. In 1999, he chaired the Financial Stability Forum’s Task Force on Implementation of Standards.
He is also Professor at the Graduate School of Economic Management, Tsinghua University, Beijing.