The media have constantly bombarded the public, pointing out, perhaps in an attempt to reassure the public, that the current Chairman of the US Federal Reserve, Ben Bernanke, is a student of the Great Depression. [...] While there are some loose parallels with the cataclysmic events of the late 1920s, such as the run up in asset prices, the eventual failure of parts of the banking system, the key difference is that recent monetary policy has been excessively loose for several years.2 The Centre for International Governance Innovation Arguably, the most important lesson from policy making in the years culminating [...] Benjamin Strong of the US Federal Reserve, Halmar Schacht of the German Reichsbank, and Montagu Norman of the Bank of England, who dominated the policy making agenda during the 1920s, left the scene. [...] Just as a series of crises have historically led to the creation of central banks in the first place, not only to help finance expensive wars, but to maintain the necessary financial stability that was periodically interrupted by shortages of liquidity or excesses in the banking system, it was the failure of central banks given considerable de facto autonomy in another time of crisis that would se [...] They may well reach the conclusion The opinions expressed in this paper are those of the that central banks failed to live up to their promise not only to deliver low authors and do not necessarily reflect the views of The and stable inflation but may also reject the “consensus” view that such an Centre for International Governance Innovation or its Board of Directors and/or Board of Governors.