The speech sets out to consider how the landscape of central banking has changed. In particular, it looks at how some of the most prominent changes to central banks' modus operandi have come as they sought to meet their monetary policy mandates in the exceptional circumstances seen during and after the global financial crisis of 2008.

By the mid 2000s, the conduct of monetary policy had seemed largely settled. Inflation targets had been adopted, alongside the operational independence for the central bank to use the short-term interest rate to steer the economy towards that target. This was matched by accountability structures.

The speech then considers how the global financial crisis complicated the conduct of monetary policy and central banking more generally. It stresses that the extraordinary and ‘unconventional’ policy actions that were taken in the face of a systemic event, and during the deep recessions and slow recoveries that ensued, have become longstanding monetary policy measures aimed at returning economic output to potential.

The speech explores some of the limits of monetary policy in the context of high leverage in parts of the private sector. Noting that monetary policy works in part by altering financial prices and asset values, and thus by affecting risk-taking and borrowing and saving decisions, it questions the notion that the monetary policy and financial stability goals of central banks can be neatly separated.

Before concluding, the speech moves to consider how the size and complexity of central bank actions in recent years has made some of them dominant forces in financial markets. It suggests that this has brought into focus the importance and difficultly of communicating current and future policy decisions. It finishes by noting that with the very accommodative monetary policy stances likely to continue, it may be some time before the modus operandi of central banking in place prior to the crisis is seen again.

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