The world’s central banks are back at the centre of global discussions around thorny issues ranging from negative interest yields to the impact of digital currencies on the future of the global banking sector. Amid these discussions, advocates of decentralisation and deregulation question the very premise of central banking as an appropriate regulatory mechanism for the next stage of the global financial evolution.
The ongoing debate over the future of central banks, however, overlooks the critical role of a financial regulator in bringing security, stability and sobriety to places lacking such characteristics due to political or other crises. There are many countries in the world where drawn-out military conflicts have debilitated state institutions and vital social and economic structures. In these cases, responsible actions by a central bank can be the decisive factor in providing economic and financial strategies to provide basic livelihoods and protect national resources.
