Bank of France Governor highlights central banks’ effectiveness in stabilizing inflation and growth despite criticism of their expanded role.
Bank of France Governor François Villeroy de Galhau stated that monetary policy remains the primary economic tool due to weak fiscal and structural policies. He noted central banks’ success in managing deflation risks pre-2020 and the 2022-23 inflation surge without triggering a recession.
Villeroy pointed to unprecedented unpredictability, including shocks from the U.S. administration, but said central banks maintained credibility. He acknowledged criticism over their mandate, instruments, and independence, framing these as challenges to their expanded role.
The speech marked his final monetary policy address as governor, reflecting on a decade of turbulence since 2015. He emphasized that while effective, central banks cannot single-handedly address all economic challenges.