German central banker sees walls in need of mending
Central banks should focus more on fighting inflation and less on bailing out struggling governments and lagging economies, the head of Germany’s central bank said Monday during a talk at the Minda de Gunzburg Center for European Studies. Jens Weidmann, the president of Deutsche Bundesbank and also a member of the European Central Bank’s governing council, advocated firm separation among central banks, governments, and private financial markets. Several central banks, including the European Central Bank, have stepped in to help manage the global financial crisis in recent years, buying government bonds and keeping interest rates near zero in order to stimulate the economy. But Weidmann cautioned against asking too much of such institutions, saying they could lose sight of inflation if loaded with other priorities. “By piling more and more stabilization tasks onto monetary policy, stability will prove ever more elusive,” he said. To reinforce his point, Weidmann analogized church and state to politics...