Introductory description

This module aims to explore and explain why (in terms of fundamental policy objectives and economics) central banks have different mandates, objectives, governance and operating procedures and thereby to open minds to the scope of possible policy choices.

Module web page

Module aims

Outline syllabus

This is an indicative module outline only to give an indication of the sort of topics that may be covered. Actual sessions held may differ.

1. Comparing Mandates and objectives. Degrees of independence.
2. Conventional Monetary Policy comparisons: (different) inflation targets; exchange rate regimes;
3. Balance sheet management; assets and liabilities; incl banknotes; cb finances
4. Operations: how interest rates are set in the market; commercial bank reserves; operational frameworks and choices; Islamic finance for central banks. Collateral.
5. Unconventional Monetary Policy: Quantitative and Credit Easing in different forms; negative rates; bank funding schemes; market maker of last resort. Forward guidance and communications.
6. Exchange rates and reserves management: how fx markets work; fx reserves; exchange rate policies; gold; IMF/SDRs.
7. Financial Stability: different governance arrangements; capital flows; crisis management.
8. Prudential Supervision and regulation: different arrangements; the Basel Capital regime.
9. Lender of last Resort and Emergency Liquidity Assistance. Different arrangements; fx swaps between central banks.
10. Other regulatory issues: conduct; fair and effective markets; payments.

Learning outcomes

By the end of the module, students should be able to:

• Demonstrate an in depth understanding of comparative central banking.
• Synthesise detailed investigation and research into relevant central banking and financial regulation issues
• Integrate theory and practice relevant to a wide range of central banking and financial regulation practices and relevant functions in different contexts.
• Understand why (in terms of fundamental policy objectives and economics) central banks have different mandates and operating practices, eg as concerns monetary policy regimes .
• Demonstrate a critical awareness of research and advanced scholarship in the area of comparative central banking.
• Reflect on and learn from some prior experience and thus be able to integrate new knowledge with past experience and apply it to a new situation.
• Make sound judgements whilst understanding the limitations on judgements made in the absence of complete data.

Indicative reading list

Reading lists can be found in Talis

Research element

Various exercises throughout the course require them to research and post information and analysis in the forum. That should prepare them for the research element required in their assignments.

Interdisciplinary

The whole module is interdisciplinary to some extent: there are aspects of economics, finance, financial markets, politics, some references to law, accounting, and consideration of general public economic policy and regulatory policy.

International

The module is designed to instruct via international comparisons. It therefore considers examples of central banks from all continents, has interviews with central bankers from many countries and exercises which require the students to look at a range of central banks, including smaller or developing countries as well as those in the large financial centres.

Subject specific skills

Draw on a range of concepts, information, techniques and perspectives in the area of comparative central banking.

Transferable skills

Written communication
Independent learning.