Still, there are exceptions. They include individuals like New York Federal Reserve Bank President Timothy Geithner, who tells it like it is, who seems unafraid to admit what he does or doesn't know, and who appears to recognize the wisdom of the old adage: forewarned is forearmed. AFX News reports on the latest words of wisdom from Mr. Geithner.
The global economy has not 'entered a new era of permanent stability,' New York Federal Reserve Bank President Timothy Geithner said this evening.
The recent era of stability has not eliminated the risk of 'manias and panics, or of shocks that could have systemic consequences,' he said.
Geithner was speaking to a derivatives conference sponsored by the Federal Reserve Bank of Atlanta. A copy of his speech was made available to reporters.
He said financial innovations may seem to have reduced risk. Also 'There has been a marked improvement in global economic performance,' with lower inflation and less volatility. That seems to have 'reduced concern about future fundamental risk' and potential damage from future shocks.
The 'extraordinary growth in earnings of energy and commodity exporters' and the growth of China and India have also had a 'material effect' on interest rates and asset prices.
At the same time, Geithner warned, consolidation of global financial firms, increased leverage and increased complacency all have raised the risk of a systemic shock.
Central bankers generally agree they can not do anything to prevent a major financial shock from occurring, only to push companies and markets to be prepared to absorb one.
Geithner made no comments on the US economy or monetary policy.
Unfortunately, Mr. Geither is more the exception than the rule these days.