Europe’s central bankers go from death to dancing

October 21, 2009

It may be strictly coincidence but as TV stations are rolling out their latest batch of ballroom shows, Europe’s central bankers appear to have caught the dancing bug.

The Bank of England’s Mervyn King and the European Central Bank’s Lorenzo Bini Smaghi, two of central banking’s more colourful characters, both appear to have it on the brain.

Last week in a speechat Siena University nestled in Italy’s Tuscan hills, ECB board member Bini Smaghi said many bank CEOs in the pre-crisis days were dancing in a suicidal game of musical chairs, allowing their banks to follow the disastrous path of packaging up and buying toxic debt parcels, hoping that a chair would still be left when the music stopped and the stampede for seats begun. He called for a responsible adult to be in charge of the music in future.

On Tuesday evening King was quick-stepping to a similar tune,  “Parallel to the long-established role which monetary policy plays in taking away the punch bowl just as the party gets going, so there is a role for the central bank to use macro-prudential policy instruments for financial stability purposes by turning down the music just as the dancing gets a little too wild,” King said.

King and Bini Smaghi have been dance partners before, although they were both a little more macabre back then. 

In June, King complained that without regulatory teeth, his institution was limited to issuing sermons or organising the burials of the UK’s dead commercial banks. Shortly after Bini Smaghi likened the ECB’s new regulatory offspring the European Systemic Risk Board to a doctor unable to force a sick patient to take the necessary medicine.

But on the bright side the switch from death to dancing may provide a telling incite into the change of mood among central bankers over recent months.

No comments so far

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see

[…] of the assets on the Fed’s balance sheet, while another ponders the significance of central bankers’ metaphors: could a shift from death to dancing be a telling insight into their changing […]

Posted by | Money Supply | Economic news digest | Report as abusive