Have Central Bankers Lost Control?
Responses from the CNBC Debate "Who's in Charge" to the question "have central bankers lost focus and control with respect to economic governance?":
• George Soros, chairman of Soros Fund Management, said central banks had lost control and allowed financial institutions to "run amok."
• Former Treasury Secretary and currentCerberus Capital Management Chairman John Snow credited bankers with "great moderation" in reacting to a period of historically low inflation and interest rates. Actions of the central banks will reduce the impact of any recession and the banks are "on the mark and on the watch," Snow said.
• Larry Summers, former Treasury Secretary and professor at Harvard, said central banks can't bring prosperity and when they make mistakes they can have enormous consequences.
Banks have had a good record over the past 25 years, but not the past two years, where they had been poor at spotting and fixing bubbles and had been consistently "behind the curve," Summers said. He also blamed a lack of international cooperation due to "proud autonomy."
• Jacob Frenkel, vice chairman at AIGand former central banker of Israel, said central banks were the pilots of the market and the only agencies that bring price stability. Frankel also said it was interesting that nobody spoke of subprime problems at last year's annual meeting.