AA Edit | Nobel season sans controversy

Ben Bernanke, Douglas Diamond and Philip Dybvig have been feted for pointing to pathways in tackling financial crises and laying down the principles that help determine the health of modern-day banking. Naming them as Nobel laureates makes the coveted prize easily relatable to the common human experience of several crises like the market meltdown of 2008 whose tentacles spared no living human being in a modern interconnected world.

The choice of Ben Bernanke, who was heading the US Federal Reserve System between 2006 and 2014, lends the economics prize universal prominence as he was acknowledged as the architect of fiscal measures that may have saved the US as well as global banking system from the greed of the subprime mortgage manipulators. He was, however, also accused of not reining in casino capitalism in time. The Diamond-Dybvig model threw light on the asset-liability mismatch that is intrinsic to today’s banking.

The current sharp rise in interest rates globally fits in with the lesson Mr Bernanke and others hold out for all that you never know what is going to happen. The Bank of England that is trying to stave off a bond market collapse by actively intervening on the lines recommended by such studies would certainly agree. It might be of some consolation that amid the gathering gloom of the world economy’s current predicament the laureates say that losing faith in the system would be the biggest failure and that a measured response in tested monetary policies is one way out.

Just before the Nobel season closed with the economics prize came the Peace Prize that was, however, predictably political in its messaging as the focus was on the war in Ukraine. Battlers for freedom of expression and the ability to speak truth to power were honoured, including Ales Bialiatski of Belarus who is still in jail.  

No matter whether the system is totalitarian, authoritarian, or democratic, the freedom to speak up is under constant threat. In the last couple of years, the Peace prize has concentrated on that aspect while avoiding the pitfalls of recognising anyone who claims to have resolved conflicts. Another Nobel season passed by without controversy with the science prizes recognising meritorious research in cutting edge fields and the literature prize honouring the art of truth-telling.