Aug. 11 (Bloomberg) — Central bankers are racing to shield
their economies from fiscal tightening and lopsided currency swings that
threaten a new global recession.
In the 72 hours after a Group of Seven conference call on Aug.
7, the Federal Reserve pledged to keep interest rates near zero through at least
mid-2013, the European Central Bank intervened in bond markets and the Bank of
England indicated it’s ready to add more stimulus if needed. Japan signaled
renewed concern about the yen and Switzerland yesterday stepped up its fight to
curb an “overvalued” franc.
“Central bankers have so far been the tower of strength,” said
Stefan Schneider, chief international economist at Deutsche Bank AG in
Frankfurt. “Lawmakers have done everything to destroy belief in their ability to
solve the problems they’re facing.”
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