Counterparties: Central bankers are the new rockstars

By Ben Walsh
December 14, 2012

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Here’s a type of attention that has escaped most of the financial world in the last few years: resounding praise. And it’s being directed at practitioners of that dullest of financial professions, central banking.

Mario Draghi, the head of the European Central Bank, is the FT’s person of the year. Draghi gets the nod for standing against an existential threat with almost Churchillian resolve and rhetoric: “Within our mandate, the ECB is ready to do whatever it takes to preserve the euro… And believe me, it will be enough”. The FT calls that July statement a “turning point in the three-year-old crisis”  that “in effect dared financial markets to challenge the ECB’s unlimited firepower”. Draghi has necessarily made the job deeply political: Matt Yglesias compared Draghi’s ECB to a “shadow government” enforcing budget cuts.

Draghi’s peers around the world are also receiving lavish plaudits from just about everybody (except, of course, those US politicians with their subtle threats). Zachary Karabel writes that central bankers are not only being forced to repeatedly save the world, “they are tending to the financial system with greater nimbleness, creativity and maturity than their political counterparts or any other societal actor”. The Economist calls this “the grey man’s burden” and says that today’s central bankers are the “most powerful and daring players in the global economy”.

If you’re looking to put a number on central bankers’ value: The Atlantic’s Matthew O’Brien, comparing nominal and potential GDP, found that a team of “superstar” central bankers can be worth a trillion dollars a year. No wonder the UK imported its next central banker. — Ben Walsh  

On to today’s links:

Progress
How the web has changed for the worse in the social networking era – Anil Dash

Liebor
For the first time more than a decade, a big bank may “agree to” criminal charges – Dealbook

Good Luck With That
Your next financial services job may be in St. Louis (or cities like it) – WSJ

Remuneration
The problem with the EU’s cap on bankers’ bonuses: it won’t actually limit pay – Quartz

New Normal
How the return of US manufacturing could fuel innovation – Annie Lowrey
Innovation almost always leads to higher wages, study says – Owen Zidar

Tragic
300 million guns for 300 million Americans: a history of our gun laws – New Yorker

Video
An AIG exec raps about bailouts, desecrates a Jay Z song – Mother Jones
John McAfee: I have only $5 million left and I didn’t kill my neighbor – Quartz

Wonks
10 of the best economics papers of the year – Andres Marroquin

Oxpeckers
The NYT public editor’s badly-aimed attack on the Dealbook conference – Felix

HP
HP’s former CEO blames the board for Autonomy deal – Bloomberg

Boondoggles
Brooklyn’s vaunted, tainted Barclays Center – Norman Oder

Taxmageddon
Why the budget crisis will drag on for months – Matt Yglesias

Infrastructure
White House petition to build a Death Star by 2016 passes 25,000 signatures – Next Web

Yikes
An optimistic trendline suggests it’ll be another two years before unemployment hits 6.5% – Sober Look

Housing
More good news on housing: inventory levels could bottom next year – Calculated Risk

Good Reads
Ravi Shankar and the West’s search for the lost chord – Robert MacMillan

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