Three bits of news from the world of finance and central banking this week:

• The Reserve Bank increased the cash rate by 50 basis points.
• A HSBC manager in Britain has been suspended for criticising climate-based financial regulations at a conference.
• And in Switzerland, the Neue Zürcher Zeitung (NZZ) newspaper claimed that central banks worldwide have gone “woke”.

These stories fit well together. Each of them is part of the global puzzle explaining why many economies suffer from inflation today – and why many central banks seem unable to restore price stability.

Let’s start at home and talk about the RBNZ. It lifted its Official Cash Rate to 2 percent – the highest it has been since 2016.

Still, with consumer price inflation running at 6.9 percent, real interest rates on bonds and mortgages remain negative. We are probably a long way from an OCR to beat the inflation monster.

Why are we in this mess? And how did the rest of the world get there, too?

The story of the fired banker provides a hint. At a conference organised by the Financial Times, HSBC head of responsible investing Stuart Kirk delivered a speech titled “Why investors need not worry about climate risk.”

To be clear, Kirk did not question climate change. He did not doubt the science, nor did he call for inaction.

However, Kirk pointed out that economic growth allows countries to deal with the negative effects of climate change. He also accused central banks and regulators of spending too much time on regulations related to climate change while neglecting their core tasks relating to financial stability.

In the wake of the unavoidable Twitter storm, and probably to save its relationship with regulators, HSBC suspended Kirk. Never mind the bank had previously approved his speech.

Yet Kirk’s analysis rings true. This week, Switzerland’s leading broadsheet NZZ ran a damning essay under the headline “High inflation is the result of recklessness and ignorance.”

“Monetary policy became “woke””, the piece said. “What was forgotten was that the central banks did not have the necessary tools for their new responsibilities, be it in social, climate or financial policy. They took on tasks that they could not fulfil and forgot the task for which they had been founded.”

Stability is the task for which central banks were established. But by becoming involved in social, indigenous or environmental policy areas, central banks lost sight of it.

Which brings us straight back to the RBNZ.