A Global Central Bank? Businessworld

Percy Mistry was back in town. The timing was impeccable: just a week after the crisis erupted on Wall Street. The message was unchanged: make the rupee fully convertible by 2012.

His views on the origin of that crisis were relevant: that the Federal Reserve printed far too much money, and that the regulators did not regulate the mortgage market. The lesson he drew was that regulation of liquidity needed to be internationalised: if there was going to be an international currency like the dollar, its supply could not be left to a national authority like the Federal Reserve. The Federal Reserve acted irresponsibly, and brought the entire world financial system to the brink. But it was not alone. The acceptability of the dollar brought forth the supply of pseudo-dollars such as the Euro-dollar.

So Mistry is right about the need for international regulation of currency, but it is unlikely to happen soon. Central bankers are a convivial lot; they meet in luxurious resorts at least two or three times a year and confer. They are very chummy (via Businessworld - A Global Central Bank?)

The other interesting thing …

Was was how Percy Mistry got appointed to the Percy Mistry Committee for Mumbai as a World Financial Centre. Big business put him there - and that is why he possibly cant see to far.

What a shame …