early phases of monetary control by central banks were often inauspicious, highly constrained, or both. monetary regimes during the latter part of the 19th century and the first part of the 20th were long on rules and short on discretion. the gold standard, and later the bretton woods regime, tethered monetary policy to a commodity or dollar anchor, with little scope for monetary discretion. and where monetary discretion did operate, it was not always a success. the federal reserve ’ s discretionary monetary actions during the great depression were a salutary lesson. bis central bankers ’ speeches but the breakdown of the bretton woods system in the 1970s brought a further sea - change. tight international rules gave way to national discretion. with the accompanying rise of “ monetarism ”, these monetary frameworks were often based around targets for the money supply. in most cases, the role of central banks was still to act as operational agent. but the technical nature of these regimes gave central banks a say in their design. a second step had been taken. the “ great inflation ” of the 1970s, together with repeated failures to hit money supply targets, began to change that picture further during the 1980s. monetary discretion was found to have come with costs. in particular, it had given birth to what economists subsequently called the “ time - consistency problem ”. this problem arose from the temptation to over - supply money or over - relax regulations today, often to finance wars or to win elections, at the expense of inflation tomorrow. this problem was thus endemic among elected officials. the birth of independence as arm ’ s - length technocrats, without the need to finance wars or win elections, central banks were seen as a bulwark against these time - consistency concerns. thus was born central bank independence. if decision - making power over monetary policy were delegated to central banks, not as operational agents but as principals, the time - consistency problem could be curbed at source. with this argument, central bank independence spread rapidly and globally during the 1980s and 1990s. and with it, central banks had taken another significant step. at the same time as monetary policy discretion was being granted, constraints were being placed around it. these were a necessary part of democratic accountability. these constraints included government - set success criteria – for example, inflation targets. in the jargon, many monetary policy regimes became characterised by instrument - independence but target - dependence. they combined rules with discretion – hence “ constrained discretion ”. yet as

significant was the accompanying shift in central bank transparency. this was seen as a necessary concomitant of delegated power. a century ago, the prevailing central bank ethos allegedly came from the then - bank of england ( boe ) governor, montagu norman : “ never apologise, never explain ”. then, secrecy and mystique were believed to be key weapons in central banks ’ armoury. media appearances were rare. central bank actions were confined to the back pages of newspapers, if at all. at the boe, the aim was to keep the bank out of the press and the press out of the bank. with independence granted, all that changed. politicians and the public demanded explanations – and sometimes apologies – for policy choices. policy meetings were preannounced and minuted. and regular publications, such as inflation reports and financial stability reports, set out the analyses underpinning these decisions. media appearances and newspaper articles began to appear. central banks moved from the back to the front pages of newspapers. journalists were no longer locked out, but instead ushered in for press conferences. another step up the stairs had been taken. end of the “ great moderation ” this brave new world looked set to continue indefinitely during the early years of this century. inflation was low and output stable, the so - called “ great moderation ”. the holy grail of growth without risk seemed to have been discovered. yet moderation was sowing the seeds of its own destruction, dulling the risk senses of central banks, regulators and market participants. in this vacuum, financial risk - taking rose to himalayan heights. the global financial crisis of 2008 brought that decisively to an end. the financial system and economy tumbled from their himalayan peaks. great moderation gave way to “ great recession ”, the sharpest and longest - lasting since the 1930s. central banks quickly bis central bankers ’ speeches acknowledged their pre - crisis blind spot – ballooning debt among both banks and non - banks. and, not for the first time in their history, they reinvented themselves. on the monetary policy front, extraordinary times resulted in extraordinary monetary measures. interest rates globally were lowered to levels previously never seen, accompanied in some major advanced countries by purchases of government securities – so - called quantitative easing ( qe ). in some countries, central banks in addition purchased private sector assets, such as mortgage - backed securities and corporate bonds – so - called “ credit easing ”. others, including