8  BIS central bankers’ speeches  Figure 1: Ongoing Weak Recovery  Figure 2: Weak Investment and Lower Productivity Growth  BIS central bankers’ speeches  9  Figure 3: Weakened Global Trade Growth  Figure 4: Indebtedness Levels of EME Government and Private Sectors  10  BIS central bankers’ speeches  Figure 5: Declined Original Sin Ratio  Figure 6: Well Capitalized EME Banking Sector  BIS central bankers’ speeches  11  Figure 7: GDP Growth Rates of EMEs and AEs and Inflation Rate in EMEs  Figure 8: Accumulated Macro-prudential Policy Space in EMEs  12  BIS central bankers’ speeches  Figure 9: Improved Economic Confidence in EMEs  Figure 10: Volatile Global Financial Markets  BIS central bankers’ speeches  13  Figure 11: Volatility in EME Financial Markets  Figure 12: GDP Growth Rates in Turkey  14  BIS central bankers’ speeches  Figure 13: Monetary Policy and Monetary Policy Conditions in Turkey  Figure 14: Differentiated Loan Growth Rates in Turkey  BIS central bankers’ speeches  15  Figure 15: Current Account Balance in Turkey  Figure 16: Worsened Inflation Expectations in Turkey  16  BIS central bankers’ speeches  Figure 17: Maturity Lengthening in External Liabilities of the Turkish Banking Sector  BIS central bankers’ speeches  17
It came care of fixing the exchange rate – first to gold under the Gold Standard and latterly in the post war period to the dollar. With the demise of the dollar standard in the early 1970s, however, the exchange rate anchor had been tossed overboard. At the Bank of England, as elsewhere, the search was on for a new nominal anchor. Into this vacuum stepped Andrew Duncan Crockett. Crockett joined the Bank in 1966 as a graduate entrant, just before the break-up of the Bretton Woods dollar standard. He set to work on the biggest problem of the day, locating a new nominal anchor. In so doing, he began working alongside another young(ish) new Bank entrant, Charles Goodhart. The result was a joint paper published in the Bank’s Quarterly Bulletin in June 1970. It was titled “The Importance of Money”.11 Re-reading it now, it was a prophetic piece of work. In the UK, it laid some of the analytical foundations for what, during the late 1970s and 1980s, became monetarism. More than that, the paper placed commercial bank money and credit at the centre of the macro-economy. It could as well have been titled “The Importance of Credit” or indeed “The Importance of Banks”. After a successful spell at the IMF, Crockett returned to the Bank of England in 1989. In 1994, he then became General Manager of the Bank for International Settlements, the central banks’ central bank. In central bank circles, change was in the air.