Central Banking: Theory and Practice in Sustaining Monetary and Financial Stability

Preface

This book aims to provide readers with an understanding of and insights into the roles and functions of central banks, the theories behind their thinking, and actual operational practices. In the wake of the global financial crisis of 2007–2010 there has been a renewed interest in central banking on the part of academics, practitioners, and the general public. Many believe that central banks had a leading role in contributing to the crisis, while others disagree. Most, however, agree that in the future, central banks need to play a leading role in maintaining both monetary and financial stability.

Although central banking is currently in the limelight, there are not many comprehensive books on the subject aimed at students or a general audience. Courses specifically devoted to central banking at the university level are still relatively rare. Students, investors, market and policy analysts, and even central banks’ new recruits often have to search among different sources to piece together what central banks actually do and what the reasons are behind their actions. The picture they arrive at, however, can be very fragmented.

The few current books on central banking that touch on the various aspects of the subject are mainly for expert audiences, that is, interested academics and seasoned central bankers. These books often assume readers have a strong background in monetary economics, banking regulation, or other central banking operation and thus delve deeply into subtopics ...