The three central bank meetings this week - the Bank of England, the European Central Bank and the Federal Reserve - made very good cases for additional stimulus measures, although they failed to specify what these would be. Equities and certain bonds that had surged on the basis of last week’s verbal assurances by central bankers and political leaders were sold off. The unfortunate reality is that, unlike during the financial crisis of 2008 and 2009, central banks can't be the saviors this time around for a struggling global economy, according to a Bloomberg commentary yesterday. Other government entities with better-suited policy tools need to step up to the plate. Why did central bankers disappoint so many this week? Perhaps they wish to keep pressure on other policy-makers who demonstrate none of the necessary urgency. To quote Mario Draghi, president of the ECB, central banks “cannot replace governments.” Central bankers, it seems, more than anyone are being careful to keep dry whatever ammunition they still have.
