SAN DIEGO Jan 4 Central banks have sacrificed
some of their cherished political independence by undertaking
fiscal-like policies to help repair the damage of the global
financial crisis, a senior official of the Federal Reserve said
on Friday, as he called the ECB one of the worst offenders.
James Bullard, president of the St. Louis Federal Reserve
Bank, called the European Central Bank's bond-buying program a
"fiscalization" of monetary policy, and said it had weakened the
ECB's response to the European recession.
"Why? By nearly all accounts, the monetary policy process
has been bogged down by political wrangling over the OMT and
other programs," Bullard said in remarks prepared for delivery
at the American Economic Association on central bank
The OMT, or outright monetary transaction program, is the
ECB's bond-buying program that allows for potentially unlimited
interventions for ailing states.
The Fed has also been accused of straying into fiscal policy
territory, which is supposed to be the exclusive preserve of
elected politicians in the United States.
John Taylor, author of the influential Taylor Rule for
central bankers, has been one of the most outspoken of these
critics and sat on the panel with Bullard.