Mumbai: February 12: The world’s top central bankers, on Friday, took part in the RBI global meet with a theme ”Challenges to central banking in the context of global financial crisis” and exchanged their views and research findings on issues revelant from a central bank’s perspective.
RBI Governor Duvvuri Subbarao, in his address, said the current global recession, a fall-out of the unprecedented financial crisis, is the most serious economic crisis that the world has faced since the Great Depression of the 1930s.
While green shoots of revival are evident and the recovery may well strengthen in due course, the role of central banks in managing the crisis and minimising the pains of adjustment has been remarkable, he stated.
The current scenario offers the central banks with both a challenge and an opportunity, said Subbarao. “A challenge because central banks were expected to address the onslaught of crisis; and an opportunity since there are lessons to be drawn from the new dimensions of the crisis and lead from the front.”
Continuing in the same vein, RBI Governor said his effort would be to flag the issues rather than argue them out extensively and lists out five major challenges to central banks in the wake of the crisis.
They are: Managing the monetary policy in a globalizing environment, redefining the mandate of central banks, responsibility of central banks towards financial stability, managing the costs & benefits of regulation, and managing the balance between the autonomy and accountability of central banks.