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Should central banks regulate interest rates?

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  • 11-02-2007 7:30pm
    #1
    silverharp
    Registered Users Posts: 17,849 ✭✭✭✭


    Should central banks regulate interest rates?

    My view is no, it should be left to the market to decide. The Fed and Japanese in particular have done a poor job since 2000 as their ultra low policy as created bubbles around the world and have increased inflation which will have negative consequences.

    A belief in gender identity involves a level of faith as there is nothing tangible to prove its existence which, as something divorced from the physical body, is similar to the idea of a soul. - Colette Colfer



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    #2
    OfflerCrocGod
    Registered Users Posts: 6,306 ✭✭✭OfflerCrocGod


    The Japs could be nice and dump some of their massive stocks of dollars but I think they won't try anything drastic as they are heavily influenced by political concerns. Mind you the Fed and ECB seem pretty good in that regard - the ECB especially is very touchy about it's independence from politicians.


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    #3
    naitkris
    Closed Accounts Posts: 660 ✭✭✭naitkris


    OfflerCrocGod wrote:
    ECB seem pretty good in that regard - the ECB especially is very touchy about it's independence from politicians.

    well the ECB looks after the Eurozone's interest rates, not Ireland's, and particularly focuses on the interests of the big nations in the Eurozone like Germany, France, and Spain when deciding the rates. Ireland in it's special circumstances with tremendous economic growth, above average inflation, etc is left to fend for itself while being tied to the leash of the ECB.

    "one size fits all" isn't good for the smaller countries in the longterm in my opinion. it is similar to asking an infant to wear a grown adults XL-sized T-shirt which is clearly not practical for the infant, but as the infant is so small and his/her voice not so loud, the XL-sized T-shirt won't be changed anytime soon by the adult.


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    #4
    thegaffer
    Closed Accounts Posts: 33 ✭thegaffer


    Before the Eurozone and EMU and all that the central bank here set Ireland's interest rate. However, the central bank never really set an independent interest rate for Ireland. When Ireland got to nominally determine its own monetary policy in 1979, it could decide in theory what it wanted to set rates at but in practise the Bundesbank had a major influence in determining Ireland's monetary policy direction. So Ireland loss of an indepedant monetary policy is no huge loss to Ireland as it never really had an independent monetary policy in the first place.


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