A silver lining and governors



Andrea Fiano’s letter to you, reader.

FLIGHT. 35 NO. ten

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Central bankers haven’t had it easy over the past 12 months. At the start of the year, the effects of the coronavirus and uncertainty over its economic consequences created a new level of concern among central banks around the world. More recently, the issue of inflation has dominated central bank comments. And yet, many central banks have started to slow down their tightening cycles; some have even cut rates, and very little, if any, will hike them until a more convincing recovery takes hold.

With that in mind, we have conducted our annual review of the performance of central bankers around the world and assigned ratings in our annual “notes”. We had to do this in light of the new global reality, which is the result of not only the coronavirus but also the intense quantitative easing between industrialized countries from Japan to the United States.

We were pleasantly surprised: this year’s class performed exceptionally well. Many central bankers from different regions have achieved top A or A- ratings, despite different types of mandates and very different local economic conditions. This is a positive verdict on the strong policy responses adopted by many monetary authorities at the global and local levels over the past 12 months.

In this issue, which coincides with the annual fall meeting of the IMF and the World Bank (virtual again this year), we also attempt to examine global economic scenarios in the short and medium term. The conclusions of Tiziana Barghini’s cover story are not as optimistic as the ratings we gave to governors. The reasons are relatively simple: uncertainty about the future developments of the pandemic and its economic (and human) consequences remains high; and the recovery is and has been uneven around the world. Emerging economies in particular have a very delicate task to balance the need for stimulus with rising public debt.

A silver lining is that productivity has increased globally during the pandemic. This is another pleasant surprise.

Andrea Fiano | Editor

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