When monetary policy was delegated to independent central banks it was not just the instrument, the policy rate, that was well-defined. This applied in many ways to the objective, too, which was primarily to maintain price stability. When the role of the central banks is expanded to include areas beyond traditional monetary policy, independence also becomes more difficult to define. One can say that the transition from a situation with one instrument and one well-defined objective to a situation with several instruments and a more complicated objective means that the independence is viewed in a different light.4 In some areas, the discussion of independence is not primarily concerned with the crisis, but linked to a disappointment over developments and what the central bank has achieved in the slightly longer run. Recent events in Japan could perhaps be said to be an example of this. The newly-appointed government there has launched a powerful new monetary easing programme as an attempt to break the long-term deflationary trend. Part of the new policy entails bringing inflation up to 2 per cent, a doubling of the inflation target set earlier by the  3  Bullard (2013) takes as an example the ECB’s OMT programme, where the bank undertakes to buy a country’s government securities if the country in question meets the fiscal policy targets set. 4  See, for example, King (2013). 4  BIS central bankers’ speeches  Bank of Japan, but which it has found difficulty attaining.
According to studies carried out at the Banque de France 1 , the disinflationary impact of imports appears to be relatively independent of import volumes: the mere existence of potential competition renders the markets, in the words of experts, more “contestable” and influences behavioural patterns. These disinflationary forces are still present. However, there are now other more powerful forces that have the opposite effect. The growth of emerging market economies and the rise in the living standards of their populations are leading to a surge in the demand for natural resources, food and energy, which logically has a strong and permanent impact on inflation. Furthermore, by strengthening the magnitude of global shocks in relation to more specifically domestic shocks and favouring the international transmission of the latter, globalisation introduces a much greater synchronisation of inflationary cycles between countries, with the ensuing risks of amplification. Overall, the effects of globalisation have ceased – probably in the long term – to be spontaneously disinflationary. The second topic that I wish to discuss concerns globalisation and financial innovation. There is, in my mind, no doubt about the long-term benefits of the financial innovation process that we have been witnessing over the past twenty years. However, we can also see that it may be accompanied by cyclical developments and structural changes that could potentially prove to be disruptive for monetary policy. Monetary and financial conditions are simultaneously influenced by central bank decisions, but are also increasingly affected by sometimes exogenous trends in asset prices and the pricing of risk.