Finance Ministry vs Central Bank

Central bank independence is all well and good. But even if a finance minister

has no control over his country’s central bank whatsoever, it’s still shocking

to see him criticize

the central bankers in public. Especially when the finance minister in question

is Agustín Carstens, minister of economy in Mexico and

former deputy managing director of the IMF.

Carstens has come out and said that Banxico’s rate hike last week was premature

– something which might well be true, but which is hardly going to reassure

foreign investors that Mexico’s fiscal-policy authorities are working hand-in-glove

with its monetary-policy authorities.

Carstens is a very good economist, and a very powerful man, but he, like David

Bonderman, might benefit from some PR coaching. Bob Rubin

never criticized Alan Greenspan, and Hank Paulson would

never criticize Ben Bernanke – not in public. This is

exactly the same.

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