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The Changing Role of Europe's Central Bankers

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The extent of the media coverage surrounding the European Central Bank's announcement of the Outright Monetary Transfers scheme a few weeks ago raised a key question about the role of central bankers in today's Europe. The scheme is designed to give a helping hand to struggling eurozone nations such as Spain and Italy, but what did the intense media coverage of the announcement by Mario Draghi, President of the ECB, say about how we view his fellow central bankers?

Ten years ago very few people in the media world, let alone the general public, would have known who Mario Draghi was. In the good times, the role of central bankers was to tweak Europe's strong, growing economies to encourage even more growth and stability.

The banking crisis that hit Europe in 2008 changed all of that. Pictures of customers queuing up outside collapsing banks such as Northern Rock made people realise that the financial industry could have a direct effect on their daily lives. As the crisis intensified, the role of Europe's central bankers changed significantly.

The technocrats were now firmly in the public eye. As Greece's economy spiralled towards a bailout, both the financial markets and the general public now looked to the European Central Bank for action and direction.

This fresh focus on Mr Draghi and his fellow technocrats at the European Central Bank is understandable at a time when their intervention is so desperately needed. The danger is when the general public starts to believe that the central bankers that govern Europe's economies are not only in the public eye, but also accountable to the public as well.

If we expect Europe's central bankers to find solutions to the increasingly desperate problems facing the eurozone, then they must be allowed to do so. Nagging fears that they are simply making it up as they go along must be pushed to the back of our minds.

The wide reporting of the ECB's announcement of OMTs last week showed that there is an undeniable public interest in the complex economic policies that are being rolled out to battle the problems at the heart of the Eurozone crisis. If the ECB's strategies show no signs of working in the coming months then we must hope that this public interest does not descend into a mob mentality that could only be damaging in the long-term.

Finally, how has this shift been reflected in our attitudes towards our own central bankers?

The Bank of England is undergoing significant change in the coming months. It has been granted new powers to regulate the UK's bloated financial sector and will also name a successor to its long-serving Governor, Sir Mervyn King, within the next 12 months.

The search for Sir Mervyn's successor must take into account the changing role of the central banker in post-banking crisis Europe. If Spain continues on its path to a potential bailout, and Italy does the same, then the Bank must be prepared to adopt a more Eurocentric standpoint.

Sir Mervyn's successor will also find him or herself under more public scrutiny than any previous Governor. We must hope that this scrutiny does not impede the Bank's newfound importance in Britain's economy.

To date, Mario Draghi has taken his changing role in his stride, bullishly pledging to do 'whatever it takes' to safeguard the Eurozone. The impending change at the top of our own central bank needs to reflect that very same shift.