Marking the 20th anniversary of zero interest rates in Japan ought to be an exercise in humility. Like the eldest child of a large family, the Bank of Japan was on its own for a while. Those that followed — the U.S. Federal Reserve and European Central Bank, to name but two — had it a bit easier. Some policymakers have acknowledged being too hard on Japan during its solo run. Former Fed chairman Ben Bernanke came away from his turn in the barrel more sympathetic.
Reviewing Japan's experience at the Brookings Institution in 2017, Bernanke graciously conceded he once thought the BOJ was too timid and, in retrospect, he was far too certain about what could be accomplished with rock-bottom borrowing costs.
"When I found myself in the role of Fed chairman, confronted by the heavy responsibilities and uncertainties that came with that office, I regretted the tone of some of my earlier comments. At a 2011 press conference, in response to a question from a Japanese reporter about my earlier views, I responded, 'I'm a little bit more sympathetic to central bankers now than I was 10 years ago.' "