SEACEN conference revisits central bank mandates

KUALA LUMPUR: The need to revisit central bank mandates after the global financial crisis, including the extent to which financial stability should be incorporated into the monetary policy framework, were among the topics discussed at the recent 53rd South East Asian Central Banks ( SEACEN) Governors’ Conference/ High- Level Seminar.

During the three- day conference from Dec15- 17, the governors highlighted that the persistent low inflation, uneven growth, accumulating financial imbalances and volatile capital flow environment had complicated the macroeconomic policy formulation.

According to a joint press release by Bank Negara Malaysia (BNM) and SEACEN yesterday, the governors said the challenges also included changing inflationary processes and the effectiveness of monetary policy to safeguard the economy against financial imbalances and shocks.

“The governors discussed the policy options to address these challenges, namely the possible inclusion of financial stability in the mandate, the use of macroprudential measures which require policy cooperation and coordination with other relevant policymakers.

“They also discussed the need to recognise the peculiarities of emerging market economies, which may require policy responses that do not necessarily coincide with mainstream thinking and practice,” it added.

The statement said the conference also covered geopolitical risks and implications for central banks, given the quasi- fiscal and redistributive nature of monetary policy, the more politically-charged context in which monetary policy is conducted, as well as the complications that political uncertainty has on economic assessment for policy making.

The governors also deliberated the implications of technological innovations for central banks, particularly on how financial innovations have been reshaping the financial landscape.

The seminar was held in conjunction with the 37th Meeting of the SEACEN Board of Governors in Bangkok, Thailand, which also coincided with the Bank of Thailand’s 75th anniversary. — Bernama