Stay humble and independent, G-30 tells central banks

Tensions between monetary authorities, governments likely to rise, report warns

- Bhagyashree Garekar

 

An influential group of financial leaders from the public and private sectors has some advice for central banks under pressure to tame inflation and engineer a soft landing for economies: Stay humble, real and independent.

The advice was contained in a special report released on Nov 30 by the Group of Thirty (G-30), a global body composed of current or former central bankers, finance ministers and senior officials of financial firms.

Established in 1978, it aims to deepen understanding of global economic and financial issues. Singapore's President Tharman Shanmugaratnam chairs its board of trustees, which oversees the governance and directions of the G-30.

Mr Tharman is in New York to attend closed-door G-30 meetings as part of his ongoing working visit to the United States, which ends on Dec 4.

The report also warned that tensions between governments and central banks are likely to rise in the near future.

It was produced by the G-30's Working Group on Monetary Policy co-chaired by Mr Jacob Frenkel, the former Bank of Israel governor and former chairman of JPMorgan Chase International; Dr Raghuram Rajan, professor of finance at the University of Chicago's Booth School of Business and former Reserve Bank of India governor; and Professor Axel Weber, the president of the Centre for Financial Studies at Goethe University and former president of Deutsche Bundesbank.

In a webinar to discuss the report's findings, Mr Frenkel said their effort was to see where mistakes were made and what lessons could be learnt after central banks in key economies appeared to be "slower than warranted" in using their toolkits to tackle post-Covid-19 inflation that was worsened by the Ukraine war.