Luis M Linde: The new challenges facing central banks

Address by Mr Luis M Linde, Governor of the Bank of Spain, at the Colegio de Ingenieros de Caminos, Madrid, 5 March 2018.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Let me begin by thanking the School of Civil Engineering for inviting me to inaugurate this cycle of meetings with regulatory agencies. Many thanks to the President of the School, its Management Board and all of you for being here today.

The international financial crisis that began in 2007 has given rise to various changes and to the emergence of new challenges. Central banks are, today, in a rather different and novel situation compared with where we were before the crisis some 10 years back, and we are affected by a debate about our functions in the economy and the thrust of our policies.

In the past decade central banks have increased monetary stimuli manifold and there have been deep-seated changes in the monetary and regulatory policy objectives and instruments implemented. We are now emerging from the crisis and this is raising even more the profile of the debate on the role central banks should play and whether the policies pursued in recent years should be maintained, or progressively abandoned, and at what speed and to what extent either alternative should be taken.