Central banks have been labelled exotic beasts: rarely seen in public, much less understood. Realisation of what central bankers do has been seeping in slowly. Over the past few decades, as bond and currency trading acquired gargantuan proportions, the arcane world of dealers kept a close watch on every statement coming out of central banks, parsing each phrase and analysing each nuance. Any action, or the faintest hint of a future one, had the potential to affect currency prices, bond rates and individual fortunes. This need for analysis and interpretation also produced a large tribe of writers called ‘central bank watchers’.
Over time, as societies overwhelmingly became dependent on debt— for housing, education or buying their next television—larger sections of the population got interested in the central bank’s actions. Any increase or decrease in interest rates, or liquidity conditions, had a direct impact on household incomes and lifestyles. And yet, despite this growing interface, central banking remains shrouded in a mysterious and inscrutable cloak.