US Fed's Stanley Fischer wants new approach to global growth

Why is the world economy still so weak and can anything more be done to accelerate growth? Six years after the near-collapse of the global financial system and more than five years into one of the strongest bull markets in history, the answer still baffles policymakers, investors and business leaders.

Last week brought more poor figures from Europe and Japan. Even in the US, Britain and China, where growth appeared to be accelerating before the summer, the latest statistics - disappointing retail sales in the US, the weakest wage figures on record in Britain and the biggest decline in credit in China since 2009 - suggested the recovery may be running out of steam.

As Stanley Fischer, the new vice-chairman of the US Federal Reserve Board, lamented on August 11 in his first major policy speech: "Year after year, we have had to explain from mid-year onwards why the global growth rate has been lower than predicted as little as two quarters back. This pattern of disappointment and downward revision sets up the first, and the basic, challenge on the list of issues policymakers face in moving ahead: restoring growth, if that is possible."

The central message of Fischer's speech - that central bankers and governments should try even harder than they have in the past five years to support economic growth - was closely echoed by Mark Carney, governor of the Bank of England.

When Barack Obama appointed him vice-chairman of the Federal Reserve, Fischer was widely viewed as more hawkish than chairwoman Janet Yellen. He was considered a restraining influence on her instinct to focus on jobs and growth rather than inflation control.

So investors and business leaders should pay attention when Fischer makes his first major speech a call for more growth-oriented monetary policies - a call that other central bankers are already heeding.