INTERNATIONAL ACADEMY OF CENTRAL BANKING

Central tasks for central bankers

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The Academy at a glance

To assist central banks around the world in overcoming their widely-varying challenges, the Official Monetary and Financial Institutions Forum (OMFIF) has created the International Academy of Central Banking (IACB).

OMFIF can advise on strategy and operations for central banks and their governing and supervisory bodies in widely-ranging jurisdictions. Drawing on the experience of OMFIF’s120-strong Advisory Board, as well as other world-class experts in the fields of central banking and international finance, the IACB provides bespoke courses for central bank staff at all levels. It promotes capacity-building and leadership training applicable to many different circumstances.

IACB courses are taught in-house and tailor-made for individual central banks. From a course list of more than 60 modules, central banks select the appropriate combination of subjects for their specific requirements. Courses are typically week-long but the ‘mix-and-match’ menu enables the duration to be flexible.

Left to right: Paul Volcker, former Chairman, Federal Reserve Board of Governors, OMFIF Golden Series Lecture, London, July 2011; Xin Wang, Chief Representative for Europe, People’s Bank of China, David Marsh, Chairman, OMFIF, Dr. Jens Weidmann, President, Deutsche Bundesbank, Mustapha Kamel Nabli, Governor, Banque Centrale de Tunisie, Jamie McAndrews, Executive Vice President and Director of Financial Research, Federal Reserve Bank of New York, Third OMFIF Meeting in Europe, Deutsche Bundesbank, Frankfurt, March 2012; Dr. Monde Mnyande, Chief Economist and Adviser to the Governor, South African Reserve Bank, OMFIF World Banking and Finance Summit, London, June 2012; Gerhard Schröder, former Chancellor, Germany, OMFIF Statesman’s Dinner, London, February 2012; Najib Tun Razak, Prime Minister, Malaysia, David Marsh, Chairman, OMFIF, Tan Sri Dato’ Dr. Zeti Akhtar Aziz, Governor, Bank Negara Malaysia, First OMFIF Meeting in Asia, Bank Negara Malaysia, Kuala Lumpur, May 2010; Miroslav Singer, Governor, Czech National Bank, OMFIF World Banking and Finance Summit, London, June 2011.

International Academy of Central Banking

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New environment for central banks

Following the 2008 financial crisis, central banks and their actions have been thrust into the limelight as rarely seen before.

The consequences spread across nations at all stages of development, across all continents. The role of central bankers, the complexities of their interactions with governments and financial markets, and the expectations placed upon them have increased substantially.

The power of central banks to change people’s lives, for better or for worse, has greatly increased.

Questions are being asked with ever greater intensity about the risks, scope and limits of central bank action, how they target and measure their achievements, how they should best use their instruments and staff, how they should cooperate internationally, and where they should best make innovations.

The role of central bankers, the complexities of their interactions with governments and financial markets and the expectations on them have increased substantially.

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Tailor-made courses are the key

IACB courses – each lasting up to a week, split up into specific modules – are tailor-made for individual central banks.

Courses are usually given in situ to ensure maximum benefit for participants, although some modules may be delivered via video-link.

Courses are accompanied by further reading suggestions. Modules are intended to cover half a day, but can be extended to a full day to allow for more intense discussions, potentially in break-out groups.

The IACB’s modules are grouped under eight headings: history; policy; regulation and supervision; economics; asset management; administration; strategy and planning; and specific regional issues.

Left to right: Dr. Joachim Nagel, Member, Executive Board, Deutsche Bundesbank, First OMFIF Economists Club Meeting, Deutsche Bundesbank, Frankfurt, November 2011; Delegates at the China-Europe Economists Symposium, Beijing, January 2013; Sanusi Lamido Sanusi, Governor, Central Bank of Nigeria, Second OMFIF Meeting in Africa, Bank of Mauritius, Port Louis, November 2012; Gill Marcus, Governor, South African Reserve Bank, First OMFIF Meeting in Africa, South African Reserve Bank, Pretoria, August 2011; Dr. Leonie Lethbridge, Chief Operating Officer, ANZ Indonesia, Perry Warjiyo, Director of Economic Research and Monetary Policy, Bank Indonesia, Prof. Niels Thygesen, Emeritus Professor of Economics, University of Copenhagen, David Marsh, Chairman, OMFIF, Rintaro Tamaki, Deputy Secretary-General, OECD, Dr. Ahmet Faruk Aysan, Member of the Board, Central Bank of the Republic of Turkey, Second OMFIF Meeting in Asia, Jakarta, November 2012; Jacques de Larosière, former Governor, Banque de France and former Managing Director, IMF, OMFIF World Banking Summit, London, June 2011.

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Customised approach as divergent patterns emerge

A customised approach to central banks’ education and management development is needed in line with their extended roles and responsibilities.

Until the early 1990s, most central banks were mainly concerned with exchange rates and managing government accounts. They then gradually shifted to emphasising inflation targets, formally or informally.

With the 2007-08 financial crisis and onset of the global recession, financial stability began to take centre stage. Developed country central banks, while remaining substantially independent from government, were given responsibility for a wider range of operations, including some that had considerable repercussions on fiscal policy and other areas of government activities. At the same time, their much-cherished independence appeared to come under threat.

Central banks in emerging market economies, in general less affected by the crisis, gained influence in many cases but – in contrast to the developed world – they also in some cases enjoyed an increase in their independence.

A customised approach to central banks’ education and management development is needed in line with their extended roles and responsibilities.

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Manoeuvring between different goals

The role of central banks has always been wider than that of private sector banks, with their mandate frequently requiring them to manoeuvre between different goals implying complex conflicts of interest.

A central bank is usually, among other things, the bank of the government, the lender of last (and sometimes first) resort, the monopoly issuer of legal tender, the guardian of the currency and the determinant of the price of money.

In recent years the list of functions has been extended further into the macroeconomic, fiscal and financial stability spheres. This puts a premium on skills other than those found in commercial or investment banks, in government administration and in academe.

Yet, all too frequently, central bankers’ education consists of ‘learning on the job’ with little preparation for the tasks they must fulfil. Helping central banks surmount these challenges is the task for which IACB was established.

All too frequently, central bankers’ education consists of ‘learning on the job’ with little preparation for the challenges they may meet.

Left to right: Ernst Welteke, former President, Deutsche Bundesbank, Lord Meghnad Desai, Chairman, OMFIF Advisory Board, Second OMFIF Meeting in Africa, Bank of Mauritius, Port Louis, November 2012; Oscar Lewisohn, Chairman, Soditic, Jean-Claude Trichet, former President, European Central Bank, OMFIF European Leadership Award, London, April 2012; Josef Bonnici, Governor, Central Bank of Malta, OMFIF World Banking and Finance Summit, London, June 2012; Dr. Hartadi Sarwono, Deputy Governor, Bank Indonesia, Second OMFIF Meeting in Asia, Jakarta, November 2012; Songzuo Xiang, Frank Scheidig, Deputy Chairmen, OMFIF Advisory Board, David Marsh, Chairman, OMFIF, Yves Mersch, Governor, Central Bank of Luxembourg and Member, European Central Bank Governing Council, Renmin University-OMFIF Renminbi Seminar, Beijing, July 2011; Dr. Fabrizio Saccomanni, Director General, Banca d’Italia, OMFIF Economists Club Meeting, Banca d’Italia, Rome, February 2012.

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The IACB offering

A sample of IACB modules is listed below. Further details can be found at www.iacb.org.uk. For a complete list of modules please contact Liisa Vainio at liisa.vainio@omfif.org or +44 (0)203 008 4602.

n History and functions of central bankingn Dealing with burst house-price bubblesn Central bank target regimesn Lean versus clean – central banks and asset pricesn The role of microprudential policy in financial stabilityn Monetary policy versus financial stability policy – silos or joined at the hip?n Money and monetarismn Central banks as asset managersn Gold as a reserve asset n Reserve management for central banksn Central banks in an era of multiple reserve currenciesn Governance and oversight in modern central banksn Internal and external communicationn Monetary policy choices for resource producersn Inside the central banking balance sheetn Emerging market monetary unions

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Liisa Vainio, Senior Coordinator, IACBliisa.vainio@omfif.org T: +44 (0) 20 3008 4602

A forum for central bankers

OMFIF was set up in January 2010 to provide a forum for official and private sector financial institutions to conduct a confidential dialogue on the twin themes of asset management and financial supervision/ regulation.

OMFIF cooperates with official institutions in all parts of the world. It has co-hosted a number of international meetings in the headquarters of central banks such as Banca d’Italia, Banco de Portugal, Bank Indonesia, Bank of Mauritius, Bank Negara Malaysia, Banque de France, Central Bank of Ireland, Central Bank of the U.A.E., De Nederlandsche Bank, Deutsche Bundesbank, European Central Bank and South African Reserve Bank. Since its inauguration, more than 150 official institutions from around the world have taken part in OMFIF gatherings.

For further information please contact: