Some of you may also have thought of the pre-Socratic philosopher, Heraclitus, who is known for his dictum of constant flow and the passing of all things. “Everything flows” thus also refers to changes in the role and general conditions of monetary policy. Both associations are correct and are inter-connected.
The central banks’ contribution to combating the crisis is one of the reasons why the current role of monetary policy is being debated so intensely. This is true across the globe, but especially in the euro area with its specific set-up and the unique situation posed by the sovereign debt crisis.