Indeed, central banks now need to think about the conduct of monetary policy in environments where the evolution of banking and payments systems already has implied and will continue to imply a declining demand for their liabilities.
A loose monetary, tight fiscal policy environment is rarely good news for a currency and as a result we look for sterling to remain under downward pressure.
Mr. Bernanke returned to Washington after giving the opening speech at the conference, organized by the Federal Reserve Bank of Boston, on "Revisiting Monetary Policy in a Low-Inflation Environment".
But a combination of tighter fiscal and monetary policy would provide a tough environment for equity markets in 2013 and 2014.
In place of the IMF, one of Argentina's largest creditors is now Hugo Chávez, Venezuela's socialist president.Mr Kirchner insisted that he will stick to fiscal solvency, "prudent" monetary policy and "a predictable economic environment".
Although national governments continue to dominate such things as the organisation of welfare states, on bigger issues like trade, the environment or monetary policy it is the EU that nowadays decides.
Although not specifically referring to the UK, the Fund said that the effect of raising taxes and cutting spending might have been increased in an environment where monetary policy – cutting interest rates, lowering exchange rates and creating new electronic money – was proving less effective than usual.
But they are small, and banks are usually much better equipped to provide financial services on a large scale.In many countries, not only are better and more predictable monetary policies improving the environment for banking; privatisation of state-owned banks has also created opportunities, and better regulation has helped too.
"When historical relationships are taken into account, it is difficult to ascribe the house price bubble either to monetary policy or to the broader macroeconomic environment," Mr. Bernanke said.
Thus, the current environment of "loose" monetary policy is unlikely to end soon.
