A slice of humble pie for crisis-hit global leaders?
Despite their outward modernity, many people across the Nordics find their moral compass in Jante Law, an early 20th century concept which basically says: You are no better, no smarter and no more important than anyone else.
A touch of such humility, according to Finland’s central bank governor Erkki Liikanen, is being adopted by the most unlikely of audiences — European and American policymakers.
And it is already bringing benefits, Liikanen said. “Because it has hit us all and so much is new in the collapse of the international financial system — it has made people humble,” said Liikanen, who sits on the European Central Bank‘s rate-setting Governing Council.
“There is nobody lecturing now, people want to find solutions. This kind convergence of views has been overwhelming compared to any other experience in my past,” he said in a speech in Oslo on Friday.
U.S. President Barack Obama came to Europe “to listen” instead of preach, as his predecessor was accused of doing. And joint global action, Liikanen says, has already done much to bring back financial market liquidity in the wake of last year’s crunch and is now tackling the problem of banks’ capital.
Liikanen said the crisis could also refine the way central banks make decisions, perhaps place more emphasis on issues such as asset price bubbles and the real economy in addition to closely analysing monetary aggregates detailing money flows.
“I am sure that when we get out of this crisis, all those who think we need one model by which to run our monetary policy will be more humble,” he said in a thinly veiled swipe at monetarists. “In monetary policy, it is good to look at all the data you have, it is good to learn.”
But he said conducting monetary policy without giving money a role is like studying theology without giving God a role.
The ECB itself took first steps on a new path on Thursday, when it decided to start buying covered bonds for $80 billion.
So are the global media underplaying humility and a spirit of cooperation learnt from the crisis? Or is Liikanen just being polite?