Central banks in emerging countries are faced with the challenging task of steering economic policy through a rapidly changing environment. While mandates of “inflation targeting” were previously viewed as best practice before the global crisis, the turmoil faced by the world economy since 2007 has brought them into question. In particular, economists have stressed the need to better take into account development in the financial sector, such as credit booms or asset prices.
These questions were examined at a conference on the theme “Setting up the Monetary Policy Framework: What Role for Financial Sector Consideration?” that took place at the Graduate Institute of International and Development Studies in Geneva on October 17 and 18. The conference was part of the Bilateral Assistance and Capacity Building for Central Banks (BCC) programme jointly run by the Graduate Institute and the Swiss State Secretariat for Economic Affairs (SECO), which will hold an annual series of similar conferences.
The conference was organised in order to bring senior policy makers from the eight central banks participating in the BCC programme together with prominent academics to exchange scientific and practical insights and draw lessons from the experiences of a broad range of countries.
The conference was structured into two parts. On October 17 six economists from central banks participating in the BCC programme presented their research and obtained feedback and comments from the participants. Seven additional economists presented summaries of their work in a poster session.
On October 18, Professor Roberto Chang (Rutgers University) delivered a keynote lecture on the theme “Rethinking Monetary Policy after the Crash”. This was followed by three panels of senior representatives from central banks, academics, and representatives from multilateral policy institutions. The panels focused on the issues of inflation targeting in open economies, how to respond to financial sector movements, and how to handle policy in crises and unusual times.
In parallel to the conference, Mr Ardian Fullani, Governor of the Bank of Albania, and Ambassador Beatrice Maser, Head of Economic Cooperation and Development at the SECO signed the agreement making the Bank of Albania a formal participant in the BCC programme.
The proceedings of the conference will be published in electronic and paper format by the end of 2013.
Read more about the Bilateral Assistance and Capacity Building for Central Banks (BCC) programme and the Institute's Centre for Finance and Development.