This comes from a speech Mark Carney gave yesterday, talking about Central Bank Independence:
In no small part due to my predecessors, particularly Lord King, the stagflationary threats in the UK were tamed by a new regime for monetary stability that was both democratically accountable and highly effective.
Clear remits. Parliamentary accountability. Sound governance. Independent, transparent and effective policy-making. These were the great successes of the time and their value endures today.
But these innovations didn’t deliver lasting macroeconomic stability. Far from it. Price stability was no guarantee of financial stability. An initially healthy focus became a dangerous distraction.Three thoughts.
First, the arrangement only worked during a credit boom that lasted from 1998 to 2008. That's not exactly an indication of success.