Central banking post-crisis: What compass for uncharted waters?

Abstract:

The global financial crisis has shaken the foundations of the deceptively comfortable pre-crisis central banking world. Central banks face a threefold challenge: economic, intellectual and institutional. This essay puts forward a compass to help central banks sail in the largely uncharted waters ahead. The compass is based on tighter integration of the monetary and financial stability functions, keener awareness of the global dimensions of those tasks, and stronger safeguards for an increasingly vulnerable central bank operational independence.

JEL Classification: E30, E44, E50, G10, G20, G28

Keywords: central banking, monetary and financial stability, macroprudential, own-house-in-order doctrine, operational independence