Recorded at the PSE-CEPR Policy Forum 2026. A country wants a stable exchange rate, it wants money to move freely across its borders, and it wants to set its own interest rates. It’s a well-known trilemma. Central bankers must pick any two, because you cannot have all three. History, it turns out, did not read that memo. Eric Monnet has spent years reading the balance sheets that central bankers kept on each other. From 1891 onwards, the Bank of France paid teams of multilingual economists to copy out the weekly and monthly accounts of every other central bank in the world. Those ledgers, now digitised, show that central banks have been far more than interest-rate setters: for more than a century they have quietly expanded their balance sheets to cushion their economies against shocks arriving from abroad. In this week’s VoxTalk, Monnet argues we have seriously underestimated how much room to manoeuvre they have used since the 19th century.



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