master of central banking - asia school of business · australian economic papers. anella received...

Leading-edge education for high-potential mid-career central bankers

Asia School of Business established in collaboration with MIT Sloan

MASTER OF CENTRAL BANKING INFORMATION BOOKLET CE

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asb.edu.my December 2019

Master of Central Banking Information Booklet 1

THE CONCEPT

The Asia School of Business (ASB) The Asia School of Business was established, as a collaboration between MIT Sloan School of Management and Bank Negara Malaysia, to be a premier business school that develops transformative and principled leaders who will contribute to a better future. The Asia School of Business brings the rigor of an MIT education to the richness and complexity of global challenges. The Asia School of Business has dedicated, state-of-the-art academic and residential facilities, located within Bank Negara’s larger Financial Education Campus, which includes the Global Knowledge Research Hub of the World Bank and numerous other institutions such as the Alliance for Financial Inclusion, the Southeast Asian Central Banks (SEACEN) Research and Training Centre, the Asian Institute of Finance, and others.

The Master of Central Banking (MCB) Our mission is to nurture the central bankers of the future. They will return to institutions that will be carrying out their mandates in a world of fast-changing financial systems. In promoting monetary and financial stability, supervising banks, overseeing payment systems or managing reserves, central banks are transforming themselves technologically. We aim to provide our students with analytical frameworks, tools, and the insights of experience, enabling them to embrace future challenges.

To prepare them for the future, the Master of Central Banking program will build on the formidable intellectual resources of MIT, itself a major source of the innovations that are reshaping the environment for central banking. MIT is notable for producing dozens of central bank governors, including Ben Bernanke of the US Federal Reserve and Mario Draghi of the European Central Bank. The students will benefit not only from a curriculum that focuses obsessively on central banking but also from the intense hands-on experience of working in teams. They will leave the program with an international network of friends who will speak the same language of central banking.

The MCB is a year-long program designed for mid-career central bankers. It will offer a comprehensive curriculum that covers the core functions of central banking, as well as key topics in organizational management including governance, leadership and ethics. Recognizing the likely future challenges of central banks, the program will emphasize the roles of financial markets, data analytics and digital technology. As at MIT, the approach to teaching will be integrative, drawing on systems thinking and innovation. The targeted students are keenly aware of the current and emerging central-banking issues, trends and challenges that they will face on graduation. They will be exposed to, and learn from, the knowledge and experience of a wide range of instructors, as well as from the experiences in other central banks.


The program’s aims, objectives and learning outcomes are designed to provide a transformative education through an integrative and forward-looking curriculum. The curriculum will complement and enhance the candidates’ existing skills and experience and equip them to take on greater responsibilities within their institutions.

Program Objectives

i. To nurture and educate central bankers of the future, enhancing their expertise in maintaining monetary and financial stability in the context of the evolving external environment.

ii. To employ critical and analytical methods to apply state of the art theories and management practices to complex issues.

iii. To enable them to evaluate central bank strategies, tools and models in a variety of contexts.

iv. To integrate theory and practice. v. To develop leadership, relationship and communication skills, enabling

participants to affect positive change in their organizations.

Course summaries are provided at the end of this booklet.


Academic Year Key dates for the 2020-2021 academic year:*

June 1, 2020 Student residences open for incoming students.

Students should plan to arrive on June 7, at the latest

June 8 First day of orientation

June 15, 2020 First day of classes

September 11, 2020 End of 1st term

September 21, 2020 Beginning of 2nd term

November 2 – December 18, 2020

Courses at MIT in Cambridge, MA, USA

December 18, 2020 End of 2nd term

December 21, 2020 – January 3, 2021

Break

January 4, 2021 Beginning of 3rd term

May 24, 2021 Graduation

*The starting dates, the MIT trip, and the graduation day are fixed. The others are indicative.

How to Apply Applicants for the program are expected to have substantial central banking experience before they enrol. We expect to have a wide geographical distribution of candidates. The intake for the first year of the program will.be limited to 50 students. Applicants are encouraged to apply early to secure a place in the program.

Applications must be completed on-line. The procedure is described in the following link https://apply.asb.edu.my/apply/ as well as in the FAQ section below.


Application deadlines:

The deadline for the first round of applications is Monday, 2 December 2019. Decisions on complete applications will be made at the latest on 17 January, 2020. The deadline of the second round of applications is Monday 6 January 2020, and decisions on complete applications will be made by 14 February 2020.

The deadline for the third round of applications is Monday 3 February 2020. Decisions on complete applications will be made by 14 March, 2020.

The Faculty

Resident Faculty

Charles H. Fine is the Chrysler LGO Professor at MIT Sloan and the founding President and Dean of the Asia School of Business. He was a founding co-director of both MIT’s Communications Futures Program and the Tata Center for Technology and Design at MIT. For over 30 years, Professor Fine has taught at MIT Sloan courses in Operations Strategy, Supply Chain Management, Quality Management, and Innovation. Professor Fine’s recent research focuses on the development of principles for entrepreneurial companies to build operations strategies and capabilities consistent with their business objectives. His previous work addressed strategic supply chain design principles for fast-clockspeed manufacturing and service industries. Professor Fine’s work has supported design and improvement of supply chain relationships for companies in electronics, automotive, aerospace, communications, and consumer products. Professor Fine is the author of Clockspeed: Winning Industry Control in the Age of Temporary Advantage (1998) and the co-author of Faster, Smarter, Greener: The Future of the Car and Urban Mobility (2017) co-written with Venkat Sumantran and David Gonsalvez. He is also a prolific writer of industry articles on quality management, flexible manufacturing, supply chain management, and operations strategy.

Charles Fine Chrysler LGO Professor at MIT Sloan, Founding President and Dean of the Asia School of Business


Eli Remolona is Professor of Finance and Director of Central Banking at the Asia School of Business (ASB). He directs the Master of Central Banking program, a collaborative effort with the MIT Sloan School of Management. He also sits on the Board of Directors of the Bank of the Philippine Islands and is Adviser to the Academy of Finance in Hong Kong. He has been Associate Editor of the International Journal of Central Banking since 2005.

Before joining the ASB in 2019, Eli was Chief Representative for Asia and the Pacific of the Bank for International Settlements (BIS). In that capacity, he served as Secretary to the Asian Consultative Council, which is composed of the Governors of the 12 leading central banks in the region. Eli joined the BIS in Basel in 1999 and for six years served as Head of Financial Markets and Editor of the BIS Quarterly Review.

Eli was also Research Officer of the Federal Reserve Bank of New York. For 14 years, he was engaged in FOMC briefings and in research on issues in international finance, financial markets and sovereign risk. He has taught at Williams College, Columbia University, New York University and the School of Economics of the University of the Philippines. He holds a Ph.D. in economics from Stanford University.

Hans Genberg joined the Asia School of Business (ASB) in Kuala Lumpur, Malaysia on July 1 2019 as Professor of Economics and Associate Director of Master of Central Banking. He joined he ASB from the SEACEN Centre, also in Kuala Lumpur, where he was the Executive Director from 1 July 2015, having served as an Adviser to the Centre from 3 March 2014.

Prior to joining SEACEN Dr. Genberg was Assistant Director at the Independent Evaluation Office of the International Monetary Fund after having been Executive Director, Research at the Hong Kong Monetary Authority. Before joining the HKMA he was Professor of International Economics at the Graduate Institute of International Studies in Geneva, Switzerland. A Swedish national, Mr. Genberg holds a Ph.D. in Economics from the University of Chicago.

Eli Remolona Professor of Finance, Director of Central Banking

Hans Genberg Professor of Economics, Associate Director of Central Banking


Anella Munro is a Professor of Economics at the Asia School of Business (ASB) and an International Faculty Fellow at MIT. She is also a Research Associate at the Centre for Applied Economic Analysis (CAMA). Her research interests are international macroeconomics, macroprudential policy and international finance.

Before joining ASB, Anella was a Senior Adviser at the Reserve Bank of New Zealand, where she was part of the research team and a member of the Macro Financial Committee, the Financial System Oversight Committee, the Financial Stability Report Advisory Group and the FMA-RBNZ on-site Review of Bank Conduct and Culture. In 2007-9, she was a Senior Economist at the Asian Office of the Bank for International Settlements, in Hong Kong. She has also worked at the Asian Development Bank, in Manila for several years. She has been a referee for the Journal of Money Credit and Banking, the Journal of International Money and Finance and Australian Economic Papers.

Anella received her Ph.D. in Economics from the University of Oxford in 2003, an M.Sc. in Development Economics from the University of Oxford in 1989, and a B.Sc. in Electrical Engineering from MIT in 1985.

Abigail Tay is an Assistant Professor of Economics at Asia School of Business, and an International Faculty Fellow at MIT. She is an applied microeconomist, with research interests in industrial organization and health economics. Abigail received her BA (with 1st Class Honours) from University of Cambridge and her Ph.D. in Economics from Stanford University. Prior to moving to Kuala Lumpur, she was Assistant Professor in the Department of Economics, at Columbia University and a Visiting Fellow in the Department of Economics at Yale University.

Anella Munro Professor of Economics

Abigail Tay Assistant Professor of Economics, International Faculty Fellow, MIT


Gabriele Ciminelli is an Assistant Professor of Finance and Economics at the Asia School of Business (ASB) in Kuala Lumpur. His research interests broadly span the fields of international finance and applied macroeconomics. Recently, he has studied how central bank communication policies influence the way in which financial markets investors change their portfolios in response to new information about the economy, using high-frequency micro-data on investment funds.

Before joining the ASB, Gabriele worked as Projects Officer in the Research Department of the International Monetary Fund, where he conducted research on structural reforms and labor markets in middle- and low-income countries. His professional background is complemented by working experiences in other international organizations, such as the European Bank for Reconstruction and Development, and the European Commission. Gabriele obtained his Ph.D. in Economics from the Tinbergen Institute and the University of Amsterdam (the Netherlands). He also holds a M.A. in International Relations from Bologna University (Italy).

Triwit Ariyathugun will join the Asia School of Business (ASB) in January 2020 as an Assistant Professor of Economics. Currently, Triwit is an International Faculty Fellow at MIT Sloan. Triwit earned a Ph.D. in Economics from the University of Chicago in 2019. Prior to his Ph.D. study, he received a Master’s degree in Financial Mathematics and a Bachelor’s degree in Economics and Mathematics both from Stanford University. Triwit’s research interests are in the areas of central banking and asset pricing. His recent project explores the implications of the interest-on-reserves policy on asset prices and macroeconomic outcomes. His other work studies the impact of news on inattentive investors’ decisions. One of his current research agendas is to study monetary policy under uncertainty.

Gabriele Ciminelli Assistant Professor of Finance and Economics

Triwit Ariyathugun Assistant Professor of Economics, International Faculty Fellow, MIT


MIT Engaged Faculty

MIT faculty will teach on a regular basis in the program both in Kuala Lumpur and during the 6-week period when students will be at SLOAN in Cambridge, MA, USA.


Members of the Advisory Board will also be teaching in the Program

The Advisory Board of the MCB program have been closely involved with the design of the curriculum. Several members have also expressed an interest in contributing to teaching in the program. Professors Merton and Orphanides will be regular faculty members, and the other Board members will give guest lectures or teach shorter modules.


FAQ

The MCB Program

• How long is the MCB program? The MCB program is an intensive, year-long, full-time residential program, based in Kuala Lumpur, Malaysia, inclusive of a six-week term at MIT in Cambridge, MA, USA. Each new class will arrive in July and will graduate the following June.

• What is the size of the MCB program? How many students are there in the class? The MCB program targets a class size of approximately 30-45 students.

• What is the expected class profile? The MCB is intended for high-potential central bank staff from all parts of the world. The goal is a diverse class representing advanced, emerging, and developing economies that will encourage the sharing of experiences and an appreciation of the importance of institutional contexts for central banking.

• Is the MCB degree awarded by ASB or MIT? The MCB degree will be granted by Asia School of Business. However, the program includes a six-week immersion program at the MIT Sloan School of Management, and MCB students will receive a certificate of completion from MIT. MCB graduates will also be granted MIT Affiliate Alumni status, which gives them an MIT Email For Life (EFL) address as well as access to MIT Alumni events and communications around the world.

MCB Curriculum and Teaching

• What is covered by the curriculum? The curriculum will comprehensively cover the core functions of central banking, namely monetary policy, financial stability, payment systems, and international reserve management as well as management topics relevant for senior central bank leaders. The curriculum will be forward-looking, offering courses in financial markets, data analytics and digital technology. The program will also offer courses in international reserve management, developing financial markets, and financial inclusion.

• Who teaches MCB classes at ASB? MCB classes in Kuala Lumpur are taught by world-class faculty, consisting of visiting MIT professors and ASB resident faculty, with guest lectures by numerous former and current global central banking leaders. During the six weeks on the MIT campus in Cambridge, Massachusetts classes are taught by MIT faculty.

• What approach is taken in the teaching of MCB courses? Courses are taught in a variety of different formats. Generally speaking, classes will be taught through a combination of lectures, case studies, student presentations and group projects. The approach to teaching will be integrative, drawing on systems thinking for integrating various streams of thought and data, and emphasizing innovative approaches to problem solving.


Admissions Qualifications/Criteria

• What is ASB looking for in an MCB candidate? Candidates for the MCB are likely to be working in a central bank and sponsored by their institution. Significant other work or academic qualifications may be considered as alternatives. The candidate will have substantial work experience at the sponsoring institution.

The MCB program seeks outstanding, mature individuals who are capable of thriving in a dynamic, rigorous learning environment with academic and professional standards similar to those in MIT graduate programs.

• What are the minimum requirements to apply to the MCB program? The MCB Admissions Committee has a comprehensive process of evaluating applications. As part of the evaluation process, the minimum requirements mandated by the Ministry of Education in Malaysia must be met. These minimum requirements include:

1. A Bachelor’s degree (or proven Equivalent), with a minimum Grade Point Average (GPA) of 2.5 on the 4.0 GPA scale (or equivalent). If the GPA is below the minimum requirement, the applicant must have at least 5 years of work experience.

2. Proficiency in the English language -- applicants must either be native English speakers OR have received a university degree taught in English. Candidates who do not fulfil either of these requirements, must provide proof of English language proficiency.

In accordance with Ministry of Education (MoE) requirements, in Malaysia all applicants whose native language is not English and have not received a university degree taught in English, must provide proof of their English language proficiency by submitting one of the following valid test scores (the minimum required score is in brackets): • IELTS (Overall band 6.0) • TOEFL (Paper-based 550, Internet-based 79) • Cambridge English Advanced/Proficiency • Pearson Test of English (PTE) Academic (50) • Malaysian University English Test (MUET) (Band 4) We can only accept English language proficiency test scores taken within two years of the date of the intake the candidate is applying for.

3. Applicants are encouraged (but not required) to submit GMAT or GRE scores, which would demonstrate their level of commitment in pursuing MCB studies as well as a level of comfort with quantitative problem-solving that will be required for some courses.

• Will the MCB program consider applications from married couples? Married couples may apply. However, each person must be endorsed by a central bank and must submit an individual online application.


Admissions and Interview Process

• What are the criteria by which the Admissions Committee evaluates applicants? ASB is seeking candidates with intellectual capability and a high degree of emotional maturity. When reviewing applications and interviewing applicants, we look for candidates with strong academic performance, who can articulate their professional and academic success, their ability to lead and influence others, their independence of thought and action, and a collaborative spirit. Candidates need to show adequate quantitative skills to succeed in some courses, such as finance. Ultimately, the Admissions Committee seeks to assemble a class of highly qualified and diverse individuals who will both contribute the most to and benefit the most from the MCB program.

• How does the admissions process work? The admissions process involves four steps:

1. In the first step, either a sponsoring central bank sends MCB the names of candidates it is willing to endorse, or an individual candidate expresses interest in the program, while providing contact information for a central bank official who would provide the endorsement.

2. The candidate applies for admission through the Applications Portal: https://apply.asb.edu.my/apply/

3. Based on an assessment of the application, the committee decides whether to invite the candidate to an interview, either in person or over a video call (e.g., Skype).

4. The committee will follow a rolling admissions process. At least once a month during the admissions process, the committee will meet to select candidates to be offered places in the program and other candidates to be placed on a waitlist. This process will be repeated until all the places have been filled.

• What is the application fee? There is no application fee.

• Who reads the MCB applications and conducts the interviews? Applications are reviewed and read by the professional admissions staff as well as selected faculty and senior leadership of the MCB program. Interviews are conducted by members of the MCB Admissions Committee.

• How important is the interview within the final admissions decision? An invitation to an interview means that the candidate has been shortlisted for further consideration. We look for emotional maturity and the applicant’s ability to communicate in a clear and professional manner. Furthermore, the interview is used as a platform to better know candidates, beyond what is found in your written application. The interviewer will provide his/her recommendations to the MCB Admissions Committee.

• How long does an interview last? An interview typically lasts approximately 45 minutes.

• Does an applicant need to travel to Kuala Lumpur for an interview? Interviews are conducted in hub cities around the world as well as on-campus, in Kuala Lumpur. When necessary, interviews are conducted via Skype.


• What does it mean to be on the waitlist? The waitlist process differs from year to year, and will depend upon the number of applications we receive. Generally, waitlisted applicants will be automatically considered in the following round and will receive an updated decision in that round.

• Does the MCB program offer deferrals? The MCB will consider deferral requests, on a case-by-case basis.

• Do applicants need to submit copies of transcripts? Applicants are required to scan and submit transcripts from all institutions from which they earned a degree. During the application process, we will accept unofficial transcripts, but formal transcripts are required by Malaysia’s Ministry of Education for matriculation and approval of your student visa.

If the transcript is not in English, applicants will be required to provide an official English translation of your transcript when applying. Applicants may use a professional translator or an English translation done by the university.

If the educational institution does not use a 4.0 Grade Point Average (GPA) grading scale, applicants must ensure that the transcripts include a description of the grading scale. If the transcript does not provide this information, applicants must submit supplemental official documentation describing the grading scale used. It will also be useful to provide supplemental official documentation that indicates the GPA (on a 4.0 scale) based on the grades or points awarded by the academic institution.

Applicants admitted to the program will be required to provide an official transcript signed and sealed from each tertiary institution attended. All admitted students will receive further instructions after they receive their admission decision. Any discrepancy between the scanned transcripts and official transcripts may result in withdrawal of our offer of admission.

• How relevant are previous academic grades? All previous academic work is important to us, and we will consider it, as one component of past performance, alongside everything else in the evaluation process.

• If I have a Master’s and/or Ph.D. degree, would I need to submit transcripts and degree certificates of these?

Yes. We require scanned copies of your transcripts and degree certificates for all degrees as part of your application. Higher degrees are likely to strengthen your application. If these documents are not in English, we would require official English translations of these as well


Fees and Payment dates

• What is included in the program fee? The program fee includes:

• ASB tuition / course fees • MIT immersion program course fees • Accommodation at the ASB residences in Kuala Lumpur. • Accommodation at the Marriot Hotel, in Cambridge, near MIT Sloan. • Hotel accommodation for visits to financial institutions in Washington/New York. • Travel to Boston (MIT) and Washington/New York. • Treks to regional central banks • Visas • Insurance • School supplies

The fee does not include transportation to Kuala Lumpur at the beginning of the program or back home at the end of the program, or food or personal expenses.

• Is the program fee paid in dollars or Malaysian Ringgit?

The program fee is paid in Malaysian Ringgit (RM). The course fee is RM 368,000, which translates to approximately $88,000, as of October 2019.

• When are fees due? A deposit of RM10,000 is due on acceptance of an offer of admission, to reserve a place. Fees are paid in three stages:

• Forty percent of the total program fee is due in early June 2020. • Thirty percent is due in early October 2020 • Thirty percent, net of the Rm10,000 deposit, is due in early January 2021.

• What sort of financial aid is available? Most MCB students are expected to be supported by their central bank or other home institution. However, for exceptional cases of need, ASB is working to secure scholarship funding.


Living and Accommodation

• What is the housing situation for MCB students? In January 2020, ASB students will move into the newly constructed Residential Center, adjacent to the academic campus. Available residential units include, one-, two- and three-bedroom apartments, all fully air-conditioned and furnished with linen, cookware and furniture. MCB program tuition includes housing in a basic unit, with larger units available to families for a nominal fee. The ASB Residential Center includes a dining area, a fitness center, parking, a day care center, a sundries shop, and other amenities.

• What is it like to live in Kuala Lumpur? Kuala Lumpur (KL) is a modern, multi-cultural city, with a significant number of global expats mixing in with people of heritages from Malay, Chinese, Hindu, and other Asian cultures. KL has all the amenities of the major cities of Asia, but with cleaner air, on average, and less dense congestion than many. The ASB campus sits on the edge of the “Green Lung” of Kuala Lumpur, so that directly to the west of the campus are vast green areas ideal for walks and bicycling. On the eastern edge of our campus sits a rail stop for the KTM commuter line, that links ASB to all other areas of the city, including to the Kuala Lumpur International Airport (KLIA).

• Can I bring my spouse and/or children to ASB with me? Families are very welcome at ASB. As mentioned, the ASB Residential Center can accommodate families with larger apartments and day care facilities. Full-time university students typically get residential visas for spouses and children without any difficulty, although working visas for spouses typically require a job offer from a Malaysian-resident institution. Kuala Lumpur has good schools, including international schools, that offer English language instruction, as well as schools where the primary language of instruction is Chinese or Bahasa Malaysia.

• Where will I live during the six-week academic term at MIT in Cambridge, MA, USA? We expect to house all of our MCB students at the Marriott Residence Inn, in Kendall Square, adjacent to the MIT campus. That, or similar housing, with double occupancy rooming, is Included in the ASB tuition. For students preferring a single room, or preferring to bring a spouse and/or children, the added room cost must be covered by the student or his/her host institution. To date, we have had a 100% success rate in getting student visas to the USA for our MBA program participants, and we expect the same results for the MCB program students. We have an almost 100% record in securing spousal visas for the USA program, but we cannot guarantee 100% assurance for spouses desiring to accompany students to MIT. Spouses remaining in KL during the MIT program will be able to reside in the ASB Residential Center.


The courses

(I) SYSTEMS THINKING

CHALLENGES OF CENTRAL BANKS The purpose of this course is to introduce the core courses of the MCB program and to give students a broad overview of the challenges facing central banks, as a way to motivate those courses. This course will invite students to think hard about these challenges and propose tentative approaches to meeting them. There will be an emphasis on student discussions. PROSEMINAR Core, 3 credits

This course will be a year-long seminar. The aim of the course is to provide a framework for systems thinking and apply that framework to support consideration of a wide range of issues faced by central banks. The course will rely heavily on lectures and discussions led by faculty members as well as guest lectures from central bankers, with liberal use of articles about current events in world economics that are relevant to central banks. The subjects of discussion will include responses by central banks to recent developments and proposals to address current and future challenges. The discussions will draw on the systems thinking framework as well as on analytical tools from other courses of the program. Many of these issues will require thinking across multiple disciplines. The course will include exercises by students about possible pilot projects for central banks. For this purpose, some emphasis will be placed on developments that suggest a need to change the way that central banks operate. Such changes would often require aspects of design, entrepreneurship and even international coordination. The design part would cover the rapid setting up of pilot projects and evaluation of such projects. The course will span three terms, meeting once a week. Students will be asked to take positions on certain challenging issues and give presentations defending their viewpoints. CRISIS PREVENTION AND MANAGEMENT Core, 3 credits

This course examines economic vulnerabilities that may precipitate economic crises, reviews preventive measures towards averting crises and, for crises that materialize, their management as they unfold. Case studies draw from the experience of different economies, starting with the Asian crisis of the late 1990s to the present. Different types of vulnerabilities and crisis episodes as well as their interactions are examined.


(II) MACROECONOMIC STABILITY

FOUNDATIONS OF MONETARY POLICY Core, 3 credits

This course covers the foundations of the theory and practice of monetary policy starting with the roles and objectives of central bank policies, and the design of policy frameworks and the instruments used to achieve the objectives. Transmission mechanisms of monetary policy are discussed, taking account of open economy considerations associated with international capital movements. Lessons from historical experience and current challenges are used to illustrate the theoretical foundations. MONETARY POLICY OPERATIONS Core, 1 credit This course digs into the most common approaches used to implement monetary policy, what we refer to as monetary policy operating procedures. The course will start by framing the operating procedures in the broader context of the monetary policy framework. It will then review key concepts about the central bank’s balance sheet and reserves to then move on to the operating procedures themselves. The course will cover both the traditional tools, such as reserve requirements, open market operations and refinancing operations, and the so-called ‘non-standard tools’, such as liquidity swap lines, forward guidance and asset purchase programs. We will end with a comparative analysis of how selected central banks implement monetary policy.

ADVANCED TOPICS IN MONETARY POLICY Elective, 1 credit This course covers, in some detail, exactly how monetary policy is decided. The US Federal Reserve provides a lot of relevant material on line (with varying lags, including details on how the forecast is put together, how the staff prepares policy alternatives, the FOMC briefing, the policy discussion, communication in the statement and the minutes). The Fed would thus be one of the central banks covered. Depending on the availability of information, we will also cover a range of other central banks, including those from emerging markets. This course will also offer intuitive discussions of the macroeconomic models used by central banks, including structural VARs and New-Keynesian DSGE models. Here the approach of the FRB/US model will be compared to the DSGE modelling approach. There will also be discussion of models of amplification and contagion, such as the model of financial frictions and the model of sudden stops.


MACROECONOMICS: GROWTH, FLUCTUATIONS, DEFICITS, AND DEBT Core, 2 credits This course covers the essential elements of macroeconomics that central bankers must master in order to assess economic conditions and the impact of domestic and external shocks to inflation and growth of the economy. The course will provide a framework to help understand economic developments in advanced and emerging economies, with both a short-term and long-term perspective. The sources of domestic and external imbalances as well as the build-up of debt and its sustainability will be studied in detail. The course will also study how information asymmetries in financial markets might create frictions with consequences for the macroeconomy.

(III) FINANCIAL MARKETS ASSET PRICING IN EFFICIENT MARKETS Core, 2 credits This course will provide central bankers an understanding of how financial markets serve to allocate resources across time, choose projects to finance and price assets to reflect risk and return. In performing their role, these markets also provide transmission mechanisms for monetary policy. Hence, an understanding of these markets is required for central bankers to evaluate market reactions to monetary policy. The course will also show how asset prices reveal information that can help guide the conduct of monetary policy.

BEHAVIORAL FINANCE AND INEFFICIENT MARKETS Core, 2 credits

This course will provide central bankers an understanding of why financial markets sometimes fail to reflect information about fundamentals. Such an understanding is important to help policymakers anticipate market reactions to monetary policy and help them decide when it is time to intervene and push the market in the right direction. HOW TO DEVELOP MONEY AND CAPITAL MARKETS Elective, 1 credit

The development of money and capital markets is an important mandate of central banks in many emerging markets. This course is about ways to create and enhance money and capital markets so that they can better perform their roles in channelling savings to their most productive uses. Governments often stand in the way of these markets, preventing them from doing their job. Yet for these markets to do their job well, a government role is often also needed, and central banks can play a supportive role. Each student will be expected to write and present two reports, each one identifying a policy issue related to a financial market in an emerging economy. Joint reports are encouraged, with appropriate adjustments for the degree of student participation.


FINANCIAL INCLUSION Elective, 1 credit Many central banks, especially those in emerging markets, consider it to be part of their mandate to promote financial inclusion. This course will update central bankers on exciting new research and initiatives on how to carry out this goal, while formulating the appropriate supervisory and regulatory framework for financial institutions that are contributing to financial inclusion. This is a writing-intensive course. Students will be expected to present two reports each. Joint work will be encouraged. Class participation will consist largely of constructive criticism of reports. INTERNATIONAL RESERVE MANAGEMENT Elective, 1 credit Many central banks, especially those in emerging markets, accumulate foreign exchange reserves as a form of insurance against capital outflows and sudden stops. The course will discuss various ways of assessing reserve adequacy, including models that take account of only country-specific factors and those that also take account of contagion risk. The course will also delve into how to divide reserves into liquidity and investment tranches and how to allocate the reserve portfolio across instruments and currencies. Finally, the course will discuss other considerations that may influence the management of reserves, such as the need to monitor global financial markets and the development of domestic financial markets.

(IV) DATA AND DIGITAL TECHNOLOGY RESEARCH METHODS FOR CENTRAL BANKERS Core, 2 credits Central banks rely on quantitative analysis in many of its functions: assessing and forecasting the state of the macroeconomy to be used in monetary policy deliberations; analyzing credit conditions, asset price developments, and financial sector safety and soundness for financial stability policy; assessing the nature of international capital flows and exchange rate developments to inform decisions on capital account management policies and interventions in the foreign exchange market, to mention just the most obvious. To carry out such analysis, central bank staff must not only master the techniques of quantitative analysis but also be able to translate economic questions into testable hypotheses, interpret econometric results for their economic as well as statistical significance, distinguish between correlation and causality in empirical research etc. This course will equip the participants with the tools and knowledge necessary to become sophisticated authors and consumers of empirical research.


BIG DATA AND MACHINE LEARNING Core, 2 credits

Central banks are massive consumers of data and rely heavily on empirical analysis to make policy decisions. The digitization of data has opened up great opportunities to collect many times more useful data than before but requires new techniques to analyze that data. This course offers an introduction to the huge datasets that are becoming available and to efficient ways of analyzing them. PAYMENT SYSTEMS AND DIGITAL CURRENCIES Core

This course is about money and how money moves. Central banks play a central role in building, maintaining, and ensuring the efficiency and security of payment systems, both domestically and internationally. This course will cover current developments in the structure and operations of payment systems, including current state-of-the art payment systems, system interdependence, risk identification and mitigation, and the critical roles of central banks.

The form of money and the “rails” on which it moves have been changing quickly. We will use the organizing frameworks of the functions of money (a medium of exchange, a unit of account and a store of value) to understand traditional and new digital payments systems. We will explore implications for efficiency, financial inclusion, financial stability and cybersecurity, disruption, and how anti-money-laundering requirements may shape how money moves in the future.

TIME SERIES METHODS Elective, 1 credit This course will cover quantitative and empirical methods that have proven to be useful in central banking and macro research. We will emphasize intuition and applications rather than the development of the methods.

Because current research in macroeconomics focuses on growth and business cycle phenomena, the appropriate methods are dynamic, time series oriented. By the end of the course, course participants should be familiar with a quantitative and empirical arsenal applicable to their own research projects in a central banking context.

PANEL DATA ANALYSIS Elective, 1 credit

Panel data datasets are gaining increasing prominence in empirical macroeconomic analysis. This course reviews the most important methods in panel data analysis. The key objective is applying these methods rather than deriving the econometric and statistical properties of the estimators. Throughout the course, we will review state-of-the-art papers attempting to answer classical macroeconomic questions such as (i) what are the determinants of aggregate private saving ratios? (ii) How big is the fiscal multiplier? (iii) What drives the response of consumption to interest rate changes?


The course is composed of three blocks. The first one introduces panel datasets and its most common estimators. The second block reviews the most common estimators used in macro (typically multi-country) panel datasets, those with a number of cross-section smaller or roughly equal to the time dimension. It also discusses potential sources of endogeneity in these setups and common approaches to deal with them. The third block focuses on micro panel datasets (those with a number of cross-sections greatly larger than the number of time periods) and discusses ways in which such datasets are being used by applied macroeconomists to estimate responses to structural shocks, making use of cross-sectional identification strategies.

(V) FINANCIAL STABILITY MANAGEMENT OF FINANCIAL INSTITUTIONS Core, 2 credits

Strategic management of financial institutions reviews a broad range of institutions that accept money from savers and invest that money in stocks, bonds or other assets. The course will explain how each of these institutions functions in terms of economics and how each is regulated by government agencies. The course will cover pass-through institutions where the savers receive the return on their investments minus management expenses – mutual funds, hedge funds, and sovereign funds. It also covers institutions offering savers some form of guaranteed returns – banks, insurance companies, and Fannie Mae. Finally, the course will cover pension plans; both defined contribution and defined benefit plans. The course is geared to the non---financial expert with background notes as well as case studies on actual institutions. The course is taught from the viewpoint of someone advising or dealing with these institutions, as well as a public official deciding upon regulatory policy. FUNCTIONAL SUPERVISION AND REGULATION Core, 2 credits

This course will provide central bankers an understanding of the state of the art in micro-prudential supervision and regulation. The course will begin with the functions of financial intermediaries and the best practice in the way they manage their risks. The course will culminate in the latest developments in expected loss provisioning, and Basel III capital and liquidity standards and the resolution of problem banks. The course will stress the distinct roles and complementarity of regulation and supervision: a comprehensive legal and regulatory framework is essential to provide the boundaries within which financial institutions must operate to control their risks and preserve their liquidity and capital adequacy, but supervision is equally essential to evaluate how closely financial institutions adhere to best practices of governance and internal control, much of which cannot be expressed as formal rules.


MACROPRUDENTIAL POLICY AND MACRO STRESS TESTING Core, 2 credits

This course will provide central bankers with an understanding of the causes of systemic financial instability and the efforts of regulators to pre-empt them or mitigate their consequences. We will compare the varying experiences of different countries with the design and implementation of stress tests of their financial systems, and discuss the effectiveness of the various macro-prudential measures that have been applied. The course will also cover crisis management and resolution as a natural follow-up to policies intended to lessen the probability of a crisis occurring.

GLOBAL AND REGIONAL COOPERATION Elective, 1 credit

This course studies international cooperation in the ongoing process of economic globalization. The focus is primarily on (i) the structure and functioning of international organizations such as the International Monetary Fund, the World Bank, the Bank for International Settlements, and (ii) international policy coordination at the Group of 7 and Group of 20 levels. The course will end by reviewing the challenges facing multilateralism at the current juncture and discussing ways in which these could be resolved.

CYBERSECURITY

Elective, 1 credit

In the current digital age, the security of data, applications, and processes is of utmost importance. Cybersecurity has become instrumental to economic activity and human rights alike. But as digital technologies penetrate deeply into almost every aspect of human experience, a broad range of social-political-economic-legal-ethical-military and other considerations have come to envelop the cybersecurity landscape. Cyber resilience is a concept that is rapidly gaining recognition. It is a wide umbrella that encompasses information security, IT infrastructure, business processes, and organizational continuity. This course will provide central bankers with the fundamentals of cybersecurity risk management. The course will emphasize how ethical, legal, and economic frameworks enable and constrain security technologies and policies.


(VI) GOVERNANCE AND MANAGEMENT

STRATEGY, LEADERSHIP AND ORGANIZATIONS

Core, 1 credit

The goal of this course is to deepen your understanding of the social and individual influences that work in fast-changing organizations. These influences will be examined from the strategic, political and cultural perspectives and from the individual, group and organizational points of view. It will be a writing-intensive course, and students will be expected to make presentations.

NEGOTIATIONS

Elective, 1 credit

The goal of this course is to help make you a better negotiator. It will emphasize a hands-on approach and personal skill building, drawing on cutting-edge research. The course will focus on nurturing leadership and negotiating skills, including coalition building.

POLITICAL ECONOMY OF CENTRAL BANKING Core, 1 credit

Independence from the political process has become enshrined in the laws governing many central banks. This course starts by examining the foundations of the argument for such independence. It then examines whether central bank independence is compatible with a broadening of central bank mandates beyond monetary stability into such areas as financial stability, income inequality, financial inclusion, and climate change.

COMMUNICATIONS

Elective, 1 credit

The goal of this course is to help make you a better communicator at work. It will emphasize a hands-on approach and personal skill building, building on cutting-edge research. The course will focus on increasing your awareness of what makes an effective communicator. ETHICS

Core, 1 credit

This course encourages students to consider grey-area decisions they are likely to face in their managerial careers, and to approach such decisions after due consideration of their stakeholders’ often divergent interests. The course introduces the triple-lens framework, wherein students are encouraged to consider the economic, legal, and ethical ramifications of their decisions. It addresses several dilemmas and classical approaches to thinking about ethical problems, and it encourages students to think through ways in which they might live their own personal values as managers.


CENTRAL BANK GOVERNANCE Core, 1 credit

The governance frameworks of central banks cover a wide spectrum of issues such as internal organization and decision-making structures, relationship with central bank boards and government institutions, legal structure, the management of financial resources, and legal framework. This course reviews international experiences related to each of these issuers with the view to identify best practices to promote accountability, transparency, and oversight. Guest lectures by current and former central bank officials will feature importantly in the course.

(VII) RESEARCH PROJECT CENTRAL BANKING MASTER’S THESIS Core, 6 credits

To complete the MCB program, each student is required to write a research paper. Students are expected to develop a research topic on their own and to work individually on the paper. They will be supervised by one faculty member. The topic of the research paper can be related to what discussed over the course of the program, but students can also draw from topics not covered during the program, provided that they still relate to central banking. The research paper can be theoretical, econometrical or narrative. A suggestion for the outline of the research paper is as follows: 1. Introduction and research statement, 2. Literature review, 3. Methodology, 4. Analysis, 5. Discussion and conclusion.


Master of Central Banking

Applications are now open for the June 2020 intake.

https://apply.asb.edu.my/apply/

Learn more: https://asb.edu.my/academic-program/master-of-central-banking

DIRECT: +603 9179 4110 | EMAIL: [email protected] | URL: www.asb.edu.my

Asia School of Business (1075414-U), Sasana Kijang, 2, Jalan Dato Onn, 50480 Kuala Lumpur, Malaysia

master of central banking - asia school of business · australian economic papers. anella received...

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