Central Banks: Reform or abolish?

Stephen Roach has written an interesting note in which he argues that central banks need to mend their ways. He asserts that they are overly fixated on 'CPI-based targeting' and have not paid enough attention to asset bubbles.

Ron Paul has argued for the abolition of the Federal Reserve. What a refreshing thought. But let's not get too excited and return to 'mainstream economics' and quote from Roach:

"When inflation is low and a price-targeting central bank pushes nominal interest rates down to unusually low levels, there are new risks to confront — namely, asset bubbles.

...The US central bank has yet to develop an exit strategy from the multi-bubble syndrome that the Fed, in its zeal for inflation targeting, has spawned. Moreover, as one bubble begets another, excess asset appreciation has become a substitute for income-based saving — forcing the US to import surplus saving from abroad in order to sustain economic growth."