With globalization, re-regulation, innovation in informational technologies, the economic and financial landscape is fast evolving. Since the global financial crisis, many argue that we face a "new normal" for most economies which is now characterized by below-trend economic growth, high unemployment, and ultra-low interest rates.
Given the above scenario, central bankers are now challenged by a new paradigm in terms of the economic and financial environment which will affect key aspects of future central banking policies. The economic structure, business processes and the way economic agents react to the changing phenomena is systemically different under this new paradigm. The highly interconnected world of macro-financial linkages and the uncertainty they create are making central banking policies based on the old paradigm, less effective. In response to this new environment, many central banks have planned or have already explicitly expanded their mandates to include maintaining financial stability.
There has been a growing call for a revival of the subdued and even abandoned role of the central bank in promoting sustainable economic growth and full employment by providing an environment conducive to supporting new areas of growth stemming from the rebalancing growth strategy. In addition, there is evidence of uneven distribution of assets and wealth following the crisis in emerging markets. Given this scenario, the roles and responsibilities of central banks in the new era are expected to expand considerably. Hence, the expanded mandates have brought about new and different challenges for the conduct of monetary policy. For example, what is the best nominal anchor for monetary policy and what is the implication of that choice of anchor for the mandate of the central banks? How and to what extent can central banks cooperate to achieve their given mandate?
These were some of the important questions that were raised and addressed at the 3rd SEACEN-CEMLA Conference on "New Paradigm in Central Banking" sponsored by Bank Negara Malaysia and Banco Central de Chile (Central Bank of Chile) in Kuala Lumpur, Malaysia, on October 21-22, 2013. SEACEN is privileged to have played host to this Conference which was held back-to-back with the SEACEN 30th Anniversary Conference.
The SEACEN-CEMLA Conference provided a unique opportunity for central banks from the Asian, Latin American and Caribbean regions for the sharing of experiences and deliberating on the shaping of central banks in the new paradigm, rethinking of monetary policy in the new economic environment and challenges for economic growth and financial stability in the Asian and Latin American economies in the "new normal".
We are happy to share the discussions and presentations via the publication of these proceedings. Indeed, it is hoped that this annual Conference will continue to promote crossregional collaboration and cooperation between the two regions, leading to further initiatives to strengthen networking and central bank learning.
The SEACEN Centre
|Fernando Tenjo Galarza
Submission process for
CEMLA receives articles or essays (papers in general) for peer-review refereeing on a continuous basis. Any person may submit original papers to be published in Monetaria provided the author or owner of its rights authorizes CEMLA to submit the article for peer-review refereeing and grants the Center translating, editing and publishing rights if accepted for publication.