Citing the IMF analysis, Bailey also noted that a significant share of new trade restrictions in the last decade was from China.
“There must be a way to manage these things, rather than letting them sit there” while the level of tension increases, he told Politico.
Bailey’s remarks reflect an emerging opening among the European monetary authorities to the argument – long driven by Washington – that existing commercial governance managers have failed to adapt to a more state -oriented world economy.
The outgoing president of the Financial Stability Board, Klaas Knot, echoed the points of Bailey during the panel session.
“Whatever you think of the American administration and their communication, they are very serious about this global problem of imbalances,” Knot told The Room. “Not all commercial balances must be in balance, there is absolutely no economic reason. But, on the other hand, there can also be an argument that certain imbalances really become excessively important. I think there is a kind of upper limit beyond which the imbalances become counterproductives.”
Geoeconomics
When asked if the growing entanglement of economic and geopolitical objectives such as prices or strategic autonomy – which some have called “geoeconomics” – constitutes a threat to the independence of the central bank, Bailey said that the trend underlined rather than compromising the case for institutional autonomy.
“I do not believe that (geoeconomics) invalidates independence. This underlines why it was so important to have independent central banks,” he said on the sidelines. “Our work consists in making difficult decisions in difficult times … I do not accept that our independence is politicized in another sense.”
Politices
