Ben Bernanke, former US Fed chairman, drew on his expertise of depression era economics. In Europe, Mario Draghi, European Central Bank president, prevented a eurozone break-up by pledging “whatever it takes” to preserve its integrity. Haruhiko Kuroda, the Bank of Japan’s governor, is now trying to drag his country out of decades of deflation. Central banks, which saved the global economy from catastrophe, now face different challenges. They have to return advanced economies to stable and sustainable growth paths. But can they do that without fresh financial market disruption? What if economies instead splutter and bubbles burst? What if there is a “bubble” in confidence in central bankers? “Financial markets have been consistently rewarded for believing central banks are their best friends. At some point those rewards have to be validated by fundamentals,” warns Mohamed El-Erian, chief economic adviser to Allianz. Ralph Atkins. Financal Times, Augus...
