Insight - Role of banks shift with Fed policy

ECB to decide: Packs of freshly printed US$20 notes are processed for bundling and packaging at the US Treasury’s Bureau of Engraving and Printing in Washington. The dollar’s weakness is bound to feature prominently in ECB’s policy meeting on Thursday. — AFP

THE US Federal Reserve’s landmark shift to a more tolerant stance on inflation will be a drag on the dollar for years and will raise hard questions about the role of central banking, challenging policymakers from Frankfurt to Tokyo.

On the face of it, the Fed’s policy tweak, unveiled on Aug 27, appears tailored to giving the US economy a shot in the arm.