Faced with these deflationary threats, central banks responded decisively with conventional policy, but they eventually ran into the lower bound on interest rates. This required them to adopt new, unconventional measures, such as largescale asset purchases, to stabilise inflation. The new environment of low inflation and unconventional policies has led to questions about the key tenets of the pre-crisis monetary policy consensus.
Some observers now query whether the circumstances that justified central bank independence still exist – and whether the grounds for delegating monetary policy to independent authorities remain valid.7  Time-inconsistency under low inflation The first claim is that, in a lower-inflation environment, the time-inconsistency problem that emerged in the 1970s has become less relevant.