The Role of Central Banks in Macroeconomic and Financial Stability

103 Pages Posted: 6 Oct 2014

Date Written: February 2014


Central banks in Africa are changing as the continent becomes increasingly integrated with the global financial system. In this context, governors from major central banks met in Basel on 11-12 May 2013 to compare notes on their experiences in dealing with the challenges of increased financial integration. Four important challenges were analysed at this meeting.

First, the recent surge in pan-African banking is driving a new wave of financial integration. This has many benefits for the region, but confronts central banks and supervisors with new challenges in monitoring and managing risks.

Second, central banks have a key role in developing local debt markets. The development of local currency bond markets is critical to Africa's financial development and resilience to shocks.

Third, financial stability frameworks need to be strengthened. Central banks must have a major voice in financial stability policy which is closely linked with monetary policy.

Finally, the prolonged period of higher-than-average commodity prices, often attracting heavy capital inflows, has boosted growth but may also have created its own financial stability risks. In this context, a macroprudential policy perspective that addresses such risks can help to limit systemic threats.

While the full publication can be downloaded using the above link, individual contributions are available separately: The Role of Central Banks in Macroeconomic and Financial Stability Financial Integration in Africa: Implications for Monetary Policy and Financial Stability Government Debt Issuance: Issues for Central Banks Financial Stability Objectives and Arrangements –What's New? Macroprudential Policies, Commodity Prices and Capital Inflows Government Debt Issuance and Central Banks – Kenya's Experience Cross-Border Expansion of Nigerian Banks: Has it Improved the Continent's Regulatory and Supervisory Frameworks?

JEL Classification: E58, E52, F34

Suggested Citation

Settlements, Bank for International, The Role of Central Banks in Macroeconomic and Financial Stability (February 2014). BIS Paper No. 76, Available at SSRN:

Bank for International Settlements (Contact Author)

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4051

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