The Challenges for Central Banks after the Crisis

The recent crisis will undoubtedly change central bank behaviour for a long time. Before the crisis, they managed short-term interest rates and looked after being credible in case of inflation shock. With the crisis, they implemented nonconventional policies and are now led to find solutions to problems that did not exist prior to the crisis. We see five new challenges ahead for central banks: the exit of ultra-expansionary monetary policies, the trap of irreversibility of monetary policies, the design of a deflation fighting kit, the identification of the assets whose prices they must watch and the risk of interest conflicts between monetary policy and banks supervision.