Central bank economic surveillance needs changed after global financial crisis - Bollard

Free audio stream, including stories that are padlocked on our site. Listen on any device, anywhere. Updated twice daily. The audio stream takes several seconds to start on Android devices.

Launch Radio player

The global financial crisis has changed the economic surveillance required by central banks, placing a greater emphasis upon using monetary policy and financial stability policy in tandem to help keep economies stable. 

This is the message of a speech by Reserve Bank Governor Dr Alan Bollard, to be delivered in Singapore tonight by Assistant Governor Dr John McDermott.

Dr Bollard’s speech, presented to the Sim Kee Boon Institute Conference on Financial Economics, states that prior to the crisis there was a clear separation between monetary policy formulation and financial stability policy, even in “full service” central banks like the Reserve Bank that perform both functions.

However, the financial crisis challenged traditional economic forecasting models and moved central banks to pay greater attention to financial market information when formulating monetary policy.

“Likewise, more attention is paid to economic imbalances and the financial health of sectors, by looking at household and business balance sheets, when assessing financial sector risks,” Dr Bollard says.

“Going forward, the aim is to set monetary and financial policy instruments to take account of the inter-relationship between the financial sector and the real economy. This will require a broader framework for economic surveillance.”

Since the crisis, information is being swapped more readily between central banks and regulators globally, and relations with treasuries and Ministers of Finance have become closer.

The Reserve Bank has also strengthened links with regulators in other countries, particularly Australia and Asian central banking partners, to help information sharing.

“Good surveillance usually will not stop nasty surprises, but it may buy some lead time and help policymakers to make better sense of surprises when they happen,” Dr Bollard says.

The speech can be accessed here.http://www.rbnz.govt.nz/speeches/4389603.html


1 · Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

1 Comment & Question

Commenter icon key: Subscriber Verified

To decod the broader framework (new world economic order): When you make the surveillance (bank information) fully synchronised and or real time; as you manipulate "surprise" collapse the US dollar ... oh and the "over valued" NZ $.... you force a need for what Alan? A world, single currency and governance to boot? The problems not mentioned though, in the framework, all those poor people suffering in the mad rush as you collapse things in transition.

Reply
Share
  • 0
  • 0

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.6350 -0.0019 -0.30%
AUD 0.9043 0.0005 0.06%
EUR 0.5653 -0.0028 -0.49%
GBP 0.4162 0.0001 0.02%
HKD 4.9220 -0.0141 -0.29%
JPY 76.4050 -0.4110 -0.54%

Commods

Commodity Price Change Time
Gold Index 1133.1 -6.200 2015-09-02T00:
Oil Brent 51.3 0.930 2015-09-02T00:
Oil Nymex 46.9 0.840 2015-09-02T00:
Silver Index 14.7 0.050 2015-09-02T00:

Indices

Symbol Open High Last %
NZX 50 5590.2 5633.4 5590.2 -0.37%
NASDAQ 4704.4 4750.0 4636.1 2.46%
DAX 10060.3 10122.3 10015.6 0.32%
DJI 16058.4 16352.6 16058.4 1.82%
FTSE 6058.5 6161.7 6058.5 0.41%
HKSE 21101.4 21288.5 21185.4 -1.18%
NI225 18359.5 18481.6 18095.4 1.42%