Academic journal article Journal of Money, Credit & Banking

Opening Remarks

Academic journal article Journal of Money, Credit & Banking

Opening Remarks

Article excerpt

The Bank annually sponsors this conference to advance knowledge of, and focus attention on, topics of substantial importance to central banks. Our practice has been to feature monetary policy issues in even-numbered years and financial policy issues in odd-numbered years. Through our collaboration with the Journal of Money, Credit, and Banking, we have been able to ensure a high level of scholarship in the conference, as well as bring its proceedings to a much larger audience.

The title of this year's conference is "What Should Central Banks Do?". Although the title itself suggests no limits, even a cursory glance at the papers reveals our intention to examine three specific roles of central banks: managing foreign exchange crises, providing liquidity to individual banks and the inter-bank market, and prudential supervision of banks, especially large, complex, banking organizations.

Central banks play a unique role on the financial stage. Central bank liabilities provide base money to a financial system, and often provide a facility for settling claims in their unit of account. By buying and selling assets in the open market, or bilaterally with individual financial firms, central banks affect the liquidity positions of individual firms and financial markets more generally. The authors of the conference papers will explore in great detail the interactions between central banks and their counter-parties, and financial markets. The papers and the discussion will provide insight into those factors that give rise to a demand for central bank liabilities, and under what terms and conditions central banks should undertake transactions that alter their own balance sheets. …

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