Leaders; Central Bankers to the Rescue?  

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Jenis: Article from Bulletin/Magazine
Dalam koleksi: The Economist (http://search.proquest.com/) vol. 400 no. 8746 (Aug. 2011), page 7.
Topik: Economic Conditions; Securities Markets; Monetary Policy; Central Banks; Politicians

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Perpustakaan Pusat (Semanggi) Nomor Panggil: EE29.67 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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The rich world's economy is in a sorry state. America fretted at seeing its credit downgraded by one of the big ratings agencies. Around the world, stockmarkets tumbled, with some recording their biggest one-day falls since 2008. Bank shares were hit especially hard, a sign of stress in the financial system. Then the central banks stepped in. The European Central Bank (ECB) let it be known that it would support Spain and Italy by expanding its bond-buying programme. Meanwhile America's Federal Reserve said it was likely to keep interest rates close to zero at least until mid-2013, and hinted that it might take other steps to support the economy. Pessimism is obviously rooted in the economic data, particularly from America, which suggest a sluggish recovery at best. But there is also the spectre of political risk. Having basically trusted politicians to sort things out for the past three years, investors have changed their mind. There is a moral hazard in central-bank activism. It risks encouraging governments to sit back and let others do the work that they find too difficult themselves. That is both a dangerous abdication of responsibility and a missed opportunity. Central bankers can buy the politicians a little time on both sides of the Atlantic. It is up to them to use it.

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