- The Future of Central Bank Cooperation
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- by Simmons, Beth A.
- Central bank cooperation depends on a few crucial parameters: the extent to which central bankers
agree on theory (end means relationships); the extent to which they can agree on goals (social
purpose); the capacity (technical and institutional) to achieve their collective goals; and whether the
broader political environment facilitates or impedes cooperation. This article explores these questions
by first providing an overview of central banks and bankers. Among the G-10 countries, central
bankers are likely to share political independence, relatively long term horizons, and (increasingly)
academic backgrounds. These conditions may be conducive to high levels of cooperation in the future.
Second, I explore the “easiest” form of cooperation – information sharing – and conclude that this is an
area in which central bank cooperation will become increasingly routinised. Cooperation to address
global financial stability is a more difficult cooperative dilemma, with tensions between the need for
efficient regulatory management and the inclusion of a broader range of cooperating institutions. In the
area of exchange rate and monetary policy coordination, consensus among the major exchange rate
authorities regarding the effectiveness of coordinated exchange market interventions has withered,
though this does not preclude a new consensus from emerging in the future. One of the most
significant challenges to central bank cooperation in the future will be how to include rising monetary
and financial powers, particularly China, into the cooperative management of international monetary
- Publication Type: WCFIA Working Paper
- Published Date: February 2006
- Field of Interest: International Economics
- Simmons, Beth. "The Future of Central Bank Cooperation." Working Paper 2008-0114, Weatherhead Center for International Affairs, Harvard University, February 2006.
- Also Bank for International Settlements Working Paper #200.