Recent events remind us how crucial it is that the banking and payments system should be protected from risks and crises. The difficulties that beset Indonesia, South Korea and Thailand in 1997 are a vivid example. So too are the acute problems confronting Russia in 1998, and the chronic financial malaise that underlies Japan's macroeconomics underperformance throughout the 1990's. Even more dramatic was the banking and economic collapse in the United States and much of Europe in the 1930's. It is a prime responsibility for central banks to try and prevent and contain the financial crises...

This book offers an overview of present day thought on the very topical subject of financial stability and central banking. The papers, written by leading researchers, provide a highly informed account of contemporary policy issues and explore the legal, regulatory, managerial and economic issues that affect central banks.

As globalization progresses, exchange rates have become increasingly wedded to internal and external economic policies. This edited collection tackles four key questions in this important and growing area: How much emphasis should be placed on the exchange rate when setting policy? *What is the success or otherwise, of different approaches to modeling exchange rates? *What determines capital flows and their impact? *What should policy makers do about monetary policy and capital flows? It is well understood that within open economies the choice of exchange rate, capital mobility and monetary...

Monetary policy mistakes can cause serious economic damage. Central banks and their worldwide observers must strive to understand the transmission mechanism of monetary policy so that they know what monetary policy can do and what it should do to stabilize inflation and output--however imprecise that understanding may be. This volume sets out different aspects of the transmission mechanism, covering practical difficulties, as well as focusing on key areas such as the exchange rate and the monetary sector. The experiences of many countries are explained.

This 2002 book explains different aspects of the transmission mechanism for monetary policy, using international data and examples.

Central banks have evolved over many years, and sometimes centuries, as policy-making, not profit-making, institutions, and yet they are structured legally and financially like 'for-profit' companies of the twenty-first century. The question is what is an appropriate level of equity, or capital, for a central bank to have so that it can function for policy effectiveness over profit-maximisation, without hindrance to the achievement and maintenance of policy goals? This collection takes the reader through historical, theoretical and factual discussions on why central banks exist and the role...