Cross-posted from City Wire
The long-held central bank narrative has collapsed and policymakers are only now admitting that their role has moved into a new, unexpected realm.
That is according to University of Southampton Prof. Richard Werner, who gave the keynote address at Citywire’s first-ever Fixed Income Retreat.
Speaking to an audience of pan-European fund buyers, the noted economist dispelled many of the myths surrounding the interaction between central banks, interest rates and growth.
Dr. Werner also said that investors need greater, local-level coordination to make sure central banks create the correct monetary policies. Instead, the exact opposite could end up happening: central banks take over the money creation role from commercial banks while abolishing physical cash, which “would dramatically change the world financial system like we’ve never seen.”