Wednesday, December 1, 2010

Wiki Leaks May Force Resignation of Central Bank Head

The leaks showed that M. King, who is the head of the Central Bank in England, which is a job like that held by Ben Bernanke at the Federal Reserve, made comments that has brought calls for his resignation. The leaks reveal that he has a poor opinion of the knowledge and ability of the new coalition that is responsible for fiscal policy. His views are also shared by several leaders in the Tory government that is leading the coalition. Furthermore, he has acted as an adviser to the coalition on fiscal policy.

In theory, the head of the Central Bank, or the US Federal Reserve, is supposed to maintain political neutrality and not comment on fiscal policy which is reserved for elected politicians. This is often a hard position to maintain since it is important that monetary policy, which is the responsibility of the Central Bank, and fiscal policy should be coordinated to achieve a common goal.

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