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Banking on the Future: The Fall and Rise of Central Banking
An inside look at the role and future of central banking in the global economy
The crash of 2008 revealed that the world's central banks had failed to offset the financial imbalances that led to the crisis, and lacked the tools to respond effectively. What lessons should central banks learn from the experience, and how, in a global financial system, should cooperation between them be enhanced? Banking on the Future provides a fascinating insider's look into how central banks have evolved and why they are critical to the functioning of market economies. The book asks whether, in light of the recent economic fallout, the central banking model needs radical reform.
Supported by interviews with leading central bankers from around the world, and informed by the latest academic research, Banking on the Future considers such current issues as the place of asset prices and credit growth in anti-inflation policy, the appropriate role for central banks in banking supervision, the ways in which central banks provide liquidity to markets, the efficiency and cost-effectiveness of central banks, the culture and individuals working in these institutions, as well as the particular issues facing emerging markets and Islamic finance. Howard Davies and David Green set out detailed policy recommendations, including a reformulation of monetary policy, better metrics for financial stability, closer links with regulators, and a stronger emphasis on international cooperation.
Exploring a crucial sector of the global economic system, Banking on the Future offers new ideas for restoring financial strength to the foundations of central banking.
The crash of 2008 revealed that the world's central banks had failed to offset the financial imbalances that led to the crisis, and lacked the tools to respond effectively. What lessons should central banks learn from the experience, and how, in a global financial system, should cooperation between them be enhanced? Banking on the Future provides a fascinating insider's look into how central banks have evolved and why they are critical to the functioning of market economies. The book asks whether, in light of the recent economic fallout, the central banking model needs radical reform.
Supported by interviews with leading central bankers from around the world, and informed by the latest academic research, Banking on the Future considers such current issues as the place of asset prices and credit growth in anti-inflation policy, the appropriate role for central banks in banking supervision, the ways in which central banks provide liquidity to markets, the efficiency and cost-effectiveness of central banks, the culture and individuals working in these institutions, as well as the particular issues facing emerging markets and Islamic finance. Howard Davies and David Green set out detailed policy recommendations, including a reformulation of monetary policy, better metrics for financial stability, closer links with regulators, and a stronger emphasis on international cooperation.
Exploring a crucial sector of the global economic system, Banking on the Future offers new ideas for restoring financial strength to the foundations of central banking.
- GenresFinance
336 pages, Hardcover
First published January 1, 2010
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Displaying 1 - 3 of 3 reviews
March 9, 2026
The authors assume you know an awful lot.
Do you know what it means to enlarge a central bank's balance sheet? Any old bank's balance sheet? The difference between fiscal and monetary policy? The definitions are not vastly complex, but they would have been very useful to the ininitiate who happened on this book. They make it clear that central bankers are a cliquish group who speak in their own shorthand, a jargon intended to convey little actual information, especially to outsiders. It would have been useful if the authors themselves took greater pains to bring the hoi polloi into this charmed circle.
When you get to the bottom line, central bankers can elect among several policy objectives: interest rate stability, acceptable rates of employment, and currency exchange rate stability among them. They have one (1) primary tool to achieve these objectives, monetary policy, which is to say, setting interest rates and reserve requirements.
It doesn't work. A mathematician would tell you that one independent variable cannot simultaneously determine three unrelated dependent variables. Something has to give. And it frequently does. Right now it is the Euro-denominated debt of the PIGS countries.
Worth slogging through, with a computer at hand so you can read the Wikipedia definitions of the various concepts being thrown around. It would have been helpful had the authors cribbed from Wikipedia for our benefit. They might even have done a better job.
I add in August 2015 that "The Creature from Jekyll Island" is a good compliment to this volume. It explains the concepts that I remark above need clarification. It is unambiguous in pointing out the dangerous collusion that must exist between central bankers and politicians. Politicians need more money than they can raise via taxes. Central banks create it. Inflation invariably follow. The citizens lose two ways: directly via taxes, and indirectly via the lost value of their savings.
Do you know what it means to enlarge a central bank's balance sheet? Any old bank's balance sheet? The difference between fiscal and monetary policy? The definitions are not vastly complex, but they would have been very useful to the ininitiate who happened on this book. They make it clear that central bankers are a cliquish group who speak in their own shorthand, a jargon intended to convey little actual information, especially to outsiders. It would have been useful if the authors themselves took greater pains to bring the hoi polloi into this charmed circle.
When you get to the bottom line, central bankers can elect among several policy objectives: interest rate stability, acceptable rates of employment, and currency exchange rate stability among them. They have one (1) primary tool to achieve these objectives, monetary policy, which is to say, setting interest rates and reserve requirements.
It doesn't work. A mathematician would tell you that one independent variable cannot simultaneously determine three unrelated dependent variables. Something has to give. And it frequently does. Right now it is the Euro-denominated debt of the PIGS countries.
Worth slogging through, with a computer at hand so you can read the Wikipedia definitions of the various concepts being thrown around. It would have been helpful had the authors cribbed from Wikipedia for our benefit. They might even have done a better job.
I add in August 2015 that "The Creature from Jekyll Island" is a good compliment to this volume. It explains the concepts that I remark above need clarification. It is unambiguous in pointing out the dangerous collusion that must exist between central bankers and politicians. Politicians need more money than they can raise via taxes. Central banks create it. Inflation invariably follow. The citizens lose two ways: directly via taxes, and indirectly via the lost value of their savings.
December 9, 2023
There aren't many books that provide the sensation of thought-provoking as this book does. The approach both authors take to explain challenging concepts, such as financial stability and the responsibilities of central banks, proves to be both captivating and easily comprehensible.
This book is an excellent resource if you want to deepen your understanding of central banks and their roles in their respective economies.
It is important to mention that this book was written in 2010, so there are a few things that have changed in the way we view monetary policy. However, the fundamentals remain the same.
Worth reading.
This book is an excellent resource if you want to deepen your understanding of central banks and their roles in their respective economies.
It is important to mention that this book was written in 2010, so there are a few things that have changed in the way we view monetary policy. However, the fundamentals remain the same.
Worth reading.
November 10, 2019
Central banks are soooo complicated.
The key role may includes, economic confident, stability of the value of money, employment and asset price.
To deal with the inherent uncertainty between capital and real sectors, the 2 main target could be money and financial stability. (inflation target and financial system regulations, keynesian and moneytary perspective.). Also I wish I would know more about asset price and bubble.
Also, there are other things like international payment system, BIS and IMF related issues and case studies.
The key role may includes, economic confident, stability of the value of money, employment and asset price.
To deal with the inherent uncertainty between capital and real sectors, the 2 main target could be money and financial stability. (inflation target and financial system regulations, keynesian and moneytary perspective.). Also I wish I would know more about asset price and bubble.
Also, there are other things like international payment system, BIS and IMF related issues and case studies.
Displaying 1 - 3 of 3 reviews