The curse of being too competent

A CENTRAL BANK’S reputation is determined as much by its relationship with the government as by its handling of financial crises and economic downturns. Over the past 300 years, as governments have sought to enhance or sometimes restrict central banks’ powers, the mood has varied from collaborative and harmonious to antagonistic and fractious. By the end of the 20th century the tone had shifted to a grudging respect. Politicians came to learn that they interfered with central banks at their peril. The technocrats were told to aim for some combination of low inflation, high employment, a stable financial system and a reliable currency, and were mostly left alone to get on with the job.