Ben Bernanke, President George W. Bush’s nominee to be the next Federal Reserve chairman, is an excellent choice – an exceptional economist, a past member of the Fed board, an independent thinker. But given his relative lack of real-world experience in financial markets, will he demonstrate the formidable global knowledge and international diplomatic skills that he will most definitely need?

Paul Volcker and Alan Greenspan, the last two occupants of the job, presided at a time of extraordinary expansion of global capital flows and the growth of a mind-boggling array of high-tech financial instruments that link national markets. Now, for example, there are nearly $2,000bn of foreign exchange transactions every day, double the level of just five years ago. The daily value of financial derivatives transactions has risen from nearly zero in 1990 to well over $1,000bn. Foreign investors control 40-50 per cent of the capitalisation of most European equity markets and the US borrows more than $2bn a day from abroad.