The head of the Reserve Bank has warned the world's most powerful central banks risk losing their independence after taking large-scale steps to stimulate their economies.
In a major speech in Thailand, Glenn Stevens said bond-buying and other policy efforts taken by the European Central Bank (ECB) and the US Federal Reserve were blurring the divide between government and central banks.
His warning comes as the Fed and the ECB contemplate new programs to stimulate economies and bail-out troubled nations.
The Fed is widely expected to announce new stimulus measures on Thursday, as its current program expires at the end of the month.
Mr Stevens said central banks might face political obstacles as they tried to wind back such programs.
"The problem will be the exit from these policies," he said.
"Ending a very lengthy period of guaranteed cheap funding for governments may prove to be politically difficult.
"There is certainly history to suggest that if we look back.
"And it's no surprise therefore that some people worry that we are heading a little bit at least back towards the world of the 1920s and the 1960s where central banks were captured by the government of the day for public debt interest reasons." Mr Stevens said while the actions taken so far had been appropriate, central bank policies had their limits.
He said the question was whether people understood the limits to what central banks could achieve.
"Central banks can provide liquidity to shore up financial stability and they can buy time for borrowers to adjust," he said.
"But they cannot, in the end, put government finances on a sustainable course.
They cannot create the real resources that need to be found from somewhere to strengthen bank capital positions.
"They can't shield people from the implications of having mis-assessed their own lifetime budget constraints and therefore having consumed too much." Economics correspondent Stephen Long told PM the speech was a message to governments as well as central banks: