Central banks: Aggressive virtues

Remember central bank independence? Inflation targeting? Central bankers have been forced to abandon such quaint ideas as they struggle to master the new world of rapid deleveraging and widespread fear. The Australian central bank cut its policy interest rate by 100 basis points on October 7, to 6%. The slice was twice as deep as markets expected. Similarly dramatic cuts around the world – or perhaps a synchronised announcement – are likely to follow. But lower official interest rates probably w...