When the Federal Reserve began its second round of quantitative easing, it was roundly criticised by emerging markets for the impact it would have on their economies.

Those officials’ concerns have now been acknowledged by some of the world’s most prominent economists. This from a pamphlet released by the Brookings Institution, Rethinking Central Banking:

The world today is more connected than ever by cross-border financial flows. The policy choices of individual countries, especially those of large, systemically significant countries, can have a substantial impact on their neighbours. When governments and central banks change their macroeconomic policy stance dramatically – as they did in the recent world financial crisis – the spillovers on other nations can be sizeable.

All of which means the major central banks must pay more attention to the global implications of their actions through the set-up of a group, which they suggest calling the International Monetary Policy Committee. Read more