The answer is China, as shown by this very nice animated infographic by the The Economist (click on the figure to magnify):
Friday, February 25, 2011
Thursday, February 3, 2011
I was once a liaison to central banker and economist Tommaso Padoa-Schioppa, one of the founding fathers of the Euro, in Rio while he was visiting Brazil, and I'm sorry to hear that he passed away recently. This colloquium in his honor at Bocconi University is an excellent example of how strong supranational central banking ties are -- it suffices to see the list of guests.
One huge mistake that politicians and the specialized press make when supporting central bank appointees is to believe that they should mostly know a lot about finance and monetary economics. Well, it's true that knowledge of these two fields is essential in central banking. However, in my opinion and experience, the most important field of economics, the one that really makes the difference between a good and a bad central banker, is public choice.
Current Federal Reserve officers in particular should heed this extremely relevant piece of advice by Mr. Padoa-Schioppa -- after all, they've been doing exactly the opposite of it for years now:
[Central banks] should also be more involved in supervising bank safety and soundness—although, to safeguard central-bank integrity, the role of chief firefighter is best played by others once trouble ignites. Central bankers “need to be more concerned about financial stability, but less involved in crises.