Central Banking for Emerging Market Economies
Vijay Shankar Vyas

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About the Book

“This book is undoubtedly a work of encyclopædic proportions, which only a master of the subject will dare to undertake. We central bankers owe a deep debt of gratitude for Vasudevan's efforts. Virtually no important aspect of central banking is left out...


“...Vasudevan's tantalising voyage through the theory and practice of central banking is a path-breaking and salutary effort. It deserves to be a manual for the modern central banker and those outside who wish to unravel the traditional mystique of monetary or economic policies....


“...Vasudevan's treatise is a delightful read for all who are seriously interested in central banking. I enjoyed the intellectual prowess of the writer.”

— A.S. Jayawardena
    GOVERNOR
    Central Bank of Sri Lanka, Colombo

 


Praise for this book

“Virtually all aspects of central banking are covered... so systema-tically and fairly that it may well turn out to be an indispensable guide-book for both advisers and policy-makers in monetary authorities as well as finance ministries...” 
— Economic and Political Weekly 


About the Author(s) / Editor(s)

Dr A Vasudevan, currently Honorary Advisor in the Reserve Bank of India, was Executive Director of the Reserve Bank between May 1996 and end-August 2000. As the Executive Director, he was in charge of research, statistics, monetary policy, and information technology departments. He has had vast international experience — Advisor to Executive Director for India at the International Monetary Fund (IMF) between 1984 and 1989; Member of the Indian Delegations to IMF / World Bank and G-24 meetings between 1984-1989 and again between 1993 and 2000; represented India at the UNDP Conference on financing of sustainable development at Santiago, Chile; Central Bank Deputy at the G-20 Deputies' meetings in 1999 and 2000; and Member of the Task Force on Implementation of Standards and the Follow-up Group on the Implementation of Standards appointed by the Financial Stability Forum located at Basle.

 

Among the several Committees on which he served, the important ones were: Expert Group on Saving and Capital Formation in India, Government of India, 1996 (Member), the Working Group on Money Supply, Reserve Bank 1998 (Vice-Chairman), and the Committee on Technology Upgradation in Banking Sector, Reserve Bank of India, 1999 (Chairman).


He has written two books : Deficit Financing, Controls, and Movement of Prices in India Since 1947 (Allied Publishers, 1967), The Strategy of Planning in India (Meenakshi Prakashan, Meerut 1970); edited two books: External Debt Management (RBI, 1999), Fifty Years of Development Economics (with D M Nachane and Ajit Karnik, Himalaya Publishing House, 1999); and over fifty articles in professional journals, both Indian and foreign. He also taught M.A. students at the University of Bombay between 1966-69 on the theories of money, and economic development and central banking.

 

Contents in Detail

Foreword

Preface

 


Section I    The Rationale of Central Banking

 

1.Introduction
        
• Why Do We Need a Central Bank ?

 

• The Recent Upsurge of Interest in Central Banking -
   the Reasons For

 

• The Context of Open/Semi-open Economies

 

• Why Central Banking for Emerging Market
   Economies ?

 

• The Indian Context

 

• Is the Indian Context Unique?

 

Box 1 : Central Banks by the End of the
           Twentieth Century    

 

 


    
Section II   The Nuts and Bolts of Central Banking
                  --- Reorientations

 

 

2.Currency and Payment System

        
• Issue and Distribution of Currency

 

• Printing and Issuance of Notes only
   by the Central Banks?

 

• A Service Provider to Issue and Distribute
   Currency

 

• Principles of Currency Issue — Any
   Fiduciary Rules?

 

• Could there be a Currency Board Instead
   of Central Bank?

 

• Payment System Services

 

• Electronic Money

 

Box 2 : Real Time Gross Settlement (RTGS) Systems

 

 

 


    
3.Banker to Government

    
• Maintenance of Accounts

 

• Domestic Debt Management

 

• Conflict of Interests — Debt Management
   and Monetary Policy

 

• Sovereign Bond Issues Abroad

 

• Should There Be a Separate Debt
   Management Agency ?

 

Box 3 : Types of Auctioning

 

Box 4 : On the ‘Crowding Out’

 

Box 5 : Ad hoc Treasury Bills: The Indian Experience

 

 


    
4.Banker to Banks    

    
• The Essential Tasks and the LoLR Function

 

• Bank Restructuring

 

• The Areas Where Commercial Banks Could be of Help

 

Box 6 : Theoretical Perspectives on Adverse Selection

 

 

 


        
Section III    The Shining Star of Central Banking    

 

    
5.Monetary Policy Making in Open/Semi
   -open Economies

        
• Objectives of Policy

 

• Reconciling Dual Objectives through
   a Policy Rule

 

• The Taylor Rule

 

• The Case for Rules As Against Discretion

 

• The Case for Discretion

 

• Indicators of Policy

 

• Lags in Policy

 

• Instruments of Policy

 

• Transmission Mechanism of Policy

 

• An Evaluation of the Channels

   in the Context of EMEs

 

• Uncertainties Due to Lags

 

• Transparency of Policies and Practices

 

Box 7 : Liquidity Adjustment Facility in India

 

Box 8 : Bank Reserves, Reserve Money, Money Supply,
          and Money Multiplier

 

Box 9 : Payments Systems and Monetary Policy

 

 


    
Section IV   The New Concerns    

    


6.Financial Stability    

    
• Financial Stability in the context of Financial
   Development

 

• The Early Warning Signals and Hedging
   Mechanisms

 

• Liquidity Forecasts

 

• Prudential Regulation and Supervision
   of Banks

 

• The International Initiatives in Evolving
    Standards and Codes

 

• Prudent Supervision by Central Banks and Other
   Agencies or by a Superbody?

 

• International Dimensions of Financial
   Stability Issues

 


Box 10 : Early Warning Signals of Crisis

 

Box 11 : Risk Management in Banks

 

Box 12 : The Basle Principles for Effective
              Banking Supervision

 

Box 13 : Key International Standards and Codes

 

Box 14 : The Indian Initiatives in Respect of
              International Standards and Codes    

 

 


    
7.Autonomy and Organizational Issues

    
• Issues in Autonomy and Independence of Central Banks

 

• Should Decision Making Processes be Left Out of Central Banks?

 

• Independence, Accountability and Central Bank Governance

 

• Independence in the Context of Implementation of International
  Standards / Codes    

 

 


    
8.Conclusions

    
Attachment :    


          The Asian Economic Crisis of the 1990s 237

        
Select References


Index

Publisher AF Press
Publication Date 2003
Number of Pages 270
ISBN 8171882811
READ MORE

Academic Foundation (AF), based in New Delhi, is India’s leading independent publisher of academic/scholarly books in Social Sciences, specialising in Economics—Development Economics and Indian Economy in particular, and allied subjects.

About the Book

“This book is undoubtedly a work of encyclopædic proportions, which only a master of the subject will dare to undertake. We central bankers owe a deep debt of gratitude for Vasudevan's efforts. Virtually no important aspect of central banking is left out...


“...Vasudevan's tantalising voyage through the theory and practice of central banking is a path-breaking and salutary effort. It deserves to be a manual for the modern central banker and those outside who wish to unravel the traditional mystique of monetary or economic policies....


“...Vasudevan's treatise is a delightful read for all who are seriously interested in central banking. I enjoyed the intellectual prowess of the writer.”

— A.S. Jayawardena
    GOVERNOR
    Central Bank of Sri Lanka, Colombo

 


Praise for this book

“Virtually all aspects of central banking are covered... so systema-tically and fairly that it may well turn out to be an indispensable guide-book for both advisers and policy-makers in monetary authorities as well as finance ministries...” 
— Economic and Political Weekly 


About the Author(s) / Editor(s)

Dr A Vasudevan, currently Honorary Advisor in the Reserve Bank of India, was Executive Director of the Reserve Bank between May 1996 and end-August 2000. As the Executive Director, he was in charge of research, statistics, monetary policy, and information technology departments. He has had vast international experience — Advisor to Executive Director for India at the International Monetary Fund (IMF) between 1984 and 1989; Member of the Indian Delegations to IMF / World Bank and G-24 meetings between 1984-1989 and again between 1993 and 2000; represented India at the UNDP Conference on financing of sustainable development at Santiago, Chile; Central Bank Deputy at the G-20 Deputies' meetings in 1999 and 2000; and Member of the Task Force on Implementation of Standards and the Follow-up Group on the Implementation of Standards appointed by the Financial Stability Forum located at Basle.

 

Among the several Committees on which he served, the important ones were: Expert Group on Saving and Capital Formation in India, Government of India, 1996 (Member), the Working Group on Money Supply, Reserve Bank 1998 (Vice-Chairman), and the Committee on Technology Upgradation in Banking Sector, Reserve Bank of India, 1999 (Chairman).


He has written two books : Deficit Financing, Controls, and Movement of Prices in India Since 1947 (Allied Publishers, 1967), The Strategy of Planning in India (Meenakshi Prakashan, Meerut 1970); edited two books: External Debt Management (RBI, 1999), Fifty Years of Development Economics (with D M Nachane and Ajit Karnik, Himalaya Publishing House, 1999); and over fifty articles in professional journals, both Indian and foreign. He also taught M.A. students at the University of Bombay between 1966-69 on the theories of money, and economic development and central banking.

 

Contents in Detail

Foreword

Preface

 


Section I    The Rationale of Central Banking

 

1.Introduction
        
• Why Do We Need a Central Bank ?

 

• The Recent Upsurge of Interest in Central Banking -
   the Reasons For

 

• The Context of Open/Semi-open Economies

 

• Why Central Banking for Emerging Market
   Economies ?

 

• The Indian Context

 

• Is the Indian Context Unique?

 

Box 1 : Central Banks by the End of the
           Twentieth Century    

 

 


    
Section II   The Nuts and Bolts of Central Banking
                  --- Reorientations

 

 

2.Currency and Payment System

        
• Issue and Distribution of Currency

 

• Printing and Issuance of Notes only
   by the Central Banks?

 

• A Service Provider to Issue and Distribute
   Currency

 

• Principles of Currency Issue — Any
   Fiduciary Rules?

 

• Could there be a Currency Board Instead
   of Central Bank?

 

• Payment System Services

 

• Electronic Money

 

Box 2 : Real Time Gross Settlement (RTGS) Systems

 

 

 


    
3.Banker to Government

    
• Maintenance of Accounts

 

• Domestic Debt Management

 

• Conflict of Interests — Debt Management
   and Monetary Policy

 

• Sovereign Bond Issues Abroad

 

• Should There Be a Separate Debt
   Management Agency ?

 

Box 3 : Types of Auctioning

 

Box 4 : On the ‘Crowding Out’

 

Box 5 : Ad hoc Treasury Bills: The Indian Experience

 

 


    
4.Banker to Banks    

    
• The Essential Tasks and the LoLR Function

 

• Bank Restructuring

 

• The Areas Where Commercial Banks Could be of Help

 

Box 6 : Theoretical Perspectives on Adverse Selection

 

 

 


        
Section III    The Shining Star of Central Banking    

 

    
5.Monetary Policy Making in Open/Semi
   -open Economies

        
• Objectives of Policy

 

• Reconciling Dual Objectives through
   a Policy Rule

 

• The Taylor Rule

 

• The Case for Rules As Against Discretion

 

• The Case for Discretion

 

• Indicators of Policy

 

• Lags in Policy

 

• Instruments of Policy

 

• Transmission Mechanism of Policy

 

• An Evaluation of the Channels

   in the Context of EMEs

 

• Uncertainties Due to Lags

 

• Transparency of Policies and Practices

 

Box 7 : Liquidity Adjustment Facility in India

 

Box 8 : Bank Reserves, Reserve Money, Money Supply,
          and Money Multiplier

 

Box 9 : Payments Systems and Monetary Policy

 

 


    
Section IV   The New Concerns    

    


6.Financial Stability    

    
• Financial Stability in the context of Financial
   Development

 

• The Early Warning Signals and Hedging
   Mechanisms

 

• Liquidity Forecasts

 

• Prudential Regulation and Supervision
   of Banks

 

• The International Initiatives in Evolving
    Standards and Codes

 

• Prudent Supervision by Central Banks and Other
   Agencies or by a Superbody?

 

• International Dimensions of Financial
   Stability Issues

 


Box 10 : Early Warning Signals of Crisis

 

Box 11 : Risk Management in Banks

 

Box 12 : The Basle Principles for Effective
              Banking Supervision

 

Box 13 : Key International Standards and Codes

 

Box 14 : The Indian Initiatives in Respect of
              International Standards and Codes    

 

 


    
7.Autonomy and Organizational Issues

    
• Issues in Autonomy and Independence of Central Banks

 

• Should Decision Making Processes be Left Out of Central Banks?

 

• Independence, Accountability and Central Bank Governance

 

• Independence in the Context of Implementation of International
  Standards / Codes    

 

 


    
8.Conclusions

    
Attachment :    


          The Asian Economic Crisis of the 1990s 237

        
Select References


Index

Publisher AF Press
Publication Date 2003
Number of Pages 270
ISBN 8171882811
Expected delivery date:
07 Jul Usually ready in 2-3 days.

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Central Banking for Emerging Market Economies

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₹ 995.00
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