Sir, John Plender bemoans central banks’ waning credibility (Insight, Feb. 17). In fact, belief in central banks was foolish in the first place and its reversal is healthy. Such mistaken trust has been upended by reality before: recall how Alan Greenspan was “The Maestro” until he wasn’t.

Central banks are reliably good at only two things: creating money to finance panics; and providing cheap finance to the governments of which they are a part. The success of all their other efforts is strictly limited by their necessarily inadequate knowledge of the uncertain, indeed unknowable, future. In the same edition of the FT (“China’s central bank chief breaks silence”), PBoC governor Zhou Xiaochuan says something much more sensible: “The central bank is neither God nor a magician who can turn uncertainties into certainties.” He’s right. Any longing for central banks to be gods or magicians or maestros is vanity and trying to catch the wind.


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