Central Banks Criticize Europe for Political Gridlock on Economy - by Jack Ewing and James Kanter

 For European officials, it may have been an especially untimely — and embarrassing — example of political gridlock.

Their failure early Saturday to agree on a crucial pillar of the euro zone’s new banking architecture, despite 18 hours of haggling, occurred just as the world’s central bankers were about to criticize politicians for exactly that kind of dithering. 

The Bank for International Settlements, a group representing central banks including the Federal Reserve and the European Central Bank, warned political leaders on Sunday that they should not expect central banks’ cheap-money policy to hold the global economy together forever. The organization, based in Basel, Switzerland, said in its annual report that politicians should do their share of “the hard but essential work of adjustment.” 

“Returning to stability and prosperity is a shared responsibility,” Jaime Caruana, the general manager of the organization, said Sunday in Basel, according to a text of his remarks. “Monetary policy has done its part.”

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