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