It was a given that Ben Bernanke would be reappointed as head of the Federal Reserve. Continuity is key in these times of central bank experimentation. But as Morgan Stanley Chairman Stephen Roach wrote in the FT a few days ago, the Federal Reserve should not be given a host of new powers, as proposed by President Obama, without greater accountability.
There is a similar problem with the Conservative plans for terminating the FSA and making the Bank of England all-powerful. Alex Hoare, chief executive of Hoare & Co, makes the point forcefully.
“The idea of a single monolithic regulator worries me: quis custodiet custodien?” he says. “At present, things may slip between the cracks, but at least we have a healthy public debate, and we can negotiate an uneasy balance between the requirements for depositor protection, economic policy, competition policy, and international politics.”