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Some Chitchat from the 4th Central Banking Conference

At the European Central Banking Conference held in Frankfurt, the big shots of the world`s biggest banking systems enjoyed a chance to communicate openly together, discuss topics of interests and talk about the wisdom of different courses of action. Present were amongst others the Federal Reserve chairman Ben Bernanke, the president of the European Central Bank Jean-Claude Trichet, Bank of Japan deputy governor Kazumasa Iwata and the governor of the People`s Bank of China Zhou XiaoChuan.

Bernanke was talking about the importance of good contact between the heads of Central Banks in order to coordinate their policies and create a globally stable financial environment. He also praised the constant exchange of ideas for giving valuable consultation between professionals. European Central Banks Trichet warned about focussing policy to much on inflation targeting and discussed solutions to preventing stagflation. He also stressed that a stronger focus on monetary policy was required just as well and went on to described money as an anchor to balance macroeconomic volatility.

The Bank of Japans Iwata explained a slump in Japanese domestic demand by factors such as a slow rate of wage increases, bad weather, and unpredictability of investment in some industries. Zhou from the Peoples Bank in China acknowledged the global interconnectivity of inflation rates and stated that there were still improvements to be made in the coordination between central banks but allowed extra time for China because it was in the middle of an economic transition.