Central Banking (eBook)

THAMMARAK MOENJAK has been deeply involved with various aspects of central banking since he started working at the Bank of Thailand (BOT) in 2000. His work experience includes modeling and forecasting, monetary policy strategy, reserves management, financial stability assessment, and corporate strategy. Aside from being the assistant chief representative of the Bank of Thailand at its New York Representative Office in 2008-2009, Thammarak was sent by the BOT and contracted as an IMF expert to help the Reserve Bank of Fiji develop a macroeconometric model for its use in the conduct of monetary policy. Thammarak recently completed a master degree in public management at the Lee Kuan Yew School of Public Policy, National University of Singapore, where he was on the Dean's List for Meritorous Performance, and was a Lee Kuan Yew Fellow at the John F. Kennedy School of Government, Harvard University. Thammarak has a Bachelor of Science degree in Economics from the London School of Economics and a PhD in Economics from the University of Melbourne.

Preface ix

Acknowledgments xi

About the Author xiii

Part One An Introduction to Central Banking

Chapter 1

A Brief Look at Central Banking History 3

Chapter 2

A Brief Overview of the International Monetary System 17

Chapter 3

Modern Central Banking Roles and Functions: What Exactly Is a Central Bank? 37

Chapter 4

A Brief Review of Modern Central Banking Mandates: What Are the Goals That Modern Central Banks Try to Achieve? 59

Part Two Monetary Stability

Chapter 5

Theoretical Foundations of the Practice of Modern Monetary Policy 77

Chapter 6

Monetary Policy Regimes: What Monetary Policy Rules a Central Bank Can Use to Achieve Monetary Stability 93

Chapter 7

Monetary Policy Implementation: Financial Market Operations 117

Chapter 8

The Monetary Policy Transmission Mechanism: How Changes in Interest Rates Affect Households, Firms, Financial Institutions, Economic Activity, and Inflation 143

Chapter 9

The Exchange Rate and Central Banking 161

Part Three Financial Stability

Chapter 10

Financial Stability: Definition, Analytical Framework, and Theoretical Foundation 189

Chapter 11

Financial Stability: Monitoring and Identifying Risks 209

Chapter 12

Financial Stability: Intervention Tools 229

Part Four Sustaining Monetary and Financial Stability for the Next Era

Chapter 13

Future Challenges for Central Banking 255

Chapter 14

Future Central Banking Strategy and Its Execution 275

Notes 287

Index 307