South Africa’s top monetary policy maker spoke for his peers around the world last week when he declared that threats to central-bank independence from politicians are no longer just an “emerging market phenomenon.”

The U.S. Federal Reserve, Bank of England and European Central Bank are feeling the heat from elected lawmakers, while India and Turkey are among others under pressure.

“There’s concern among the central-banking community that the independence of central banks could be under threat,” South African Reserve Bank Governor Lesetja Kganyago said.

The threat could have real economic consequences: A study in the 1990s by economists Alberto Alesina and Lawrence Summers concluded that independent central banks were better at controlling inflation without damaging output or employment.

Financial markets risk being unnerved if investors suspect central banks will bow to lobbying and take their eye off inflation. That could push up long-term interest rates. Conversely, officials might feel the need to stamp their authority by raising short-term borrowing costs higher than they would otherwise.

Here’s a rundown of the monetary institutions getting unwanted attention from politicians.

U.S.
Almost a year into the job, Jerome Powell has run into increasingly harsh criticism from Donald Trump, the first American president in two decades to lash out at the Fed.

Just in the past month, Trump said he’s “not even a little bit happy” about his choice of chairman, and called the Fed a “much bigger problem than China.” The central bank has raised interest rates eight times since December 2015, from near-zero, and is teeing up another hike in December.

While Powell has recently sounded more open to slowing the pace of tightening next year, Fed officials insist they won’t succumb to political pressure and will rely on economic data to guide them.

TURKEY
Turkish President Recep Tayyip Erdogan is at the forefront of attacks on central-bank independence, loudly and frequently proclaiming his unorthodox views. He’s called for lower interest rates for years, saying -- in contradiction to textbook economics -- that would curb inflation.

First « 1 2 3 4 » Next