Dhaka, Oct. 12 -- A standoff between central banks and their cash-strapped governments may well be looming as an intensifying bond market crunch reopens questions about the political independence of the banks well beyond their interest-rate policy.

Central banks currently appear reluctant to rebuild holdings of sovereign debt, yet those holdings played a significant role in the swelling public borrowing over the past decade. Moving forward, that means either an improbable fiscal tightening will need to emerge or political knives will be sharpened.

Numerous elections in the US, France, Italy and Spain over the coming year mean significant spending cuts are unlikely to be on the agenda. If bond markets continue to tighten - as we've seen ...