Financing Global Development: The Role of Central Banks

German Development Institute/Deutsches Institut für Entwicklungspolitik (DIE) Briefing Paper 8/2015

4 Pages Posted: 19 Jun 2016

See all articles by Florence Dafe

Florence Dafe

Deutsches Institut für Entwicklungspolitik (DIE) - German Development Institute (DIE)

Ulrich Volz

University of London - School of Oriental and African Studies (SOAS) - Economics; Deutsches Institut für Entwicklungspolitik (DIE) - German Development Institute (DIE)

Date Written: 2015

Abstract

In many developing and emerging economies, central banks have begun over the past decade to place renewed emphasis on the promotion of economic development and structural transformation, looking beyond narrow mandates for macroeconomic stability. Developmental central bank policies have included policies directed at financial sector development, the promotion of financial inclusion and aligning the financial system with sustainable development. Widening the mandate of central banks can help promote sustainable economic development by improving the framework conditions for financing the post-2015 development agenda. However, a wider mandate un-doubtedly complicates matters, as developmental objectives may at times conflict with stability objectives. As central bank mandates widen, it will therefore be important to reform central bank policy frameworks with a view towards addressing the risks arising from a wider central bank mandate. The reform of central bank policy frameworks may help to ensure that central banks promote economic development and stability in a balanced manner, and thus be an important building block of a new framework for development finance.

Keywords: Central banks, development, green finance

Suggested Citation

Dafe, Florence and Volz, Ulrich, Financing Global Development: The Role of Central Banks (2015). German Development Institute/Deutsches Institut für Entwicklungspolitik (DIE) Briefing Paper 8/2015. Available at SSRN: https://ssrn.com/abstract=2797226 or http://dx.doi.org/10.2139/ssrn.2797226

Florence Dafe (Contact Author)

Deutsches Institut für Entwicklungspolitik (DIE) - German Development Institute (DIE) ( email )

Tulpenfeld 6
Bonn, 53113
Germany

Ulrich Volz

University of London - School of Oriental and African Studies (SOAS) - Economics

London, WC1E 7HU
United Kingdom

Deutsches Institut für Entwicklungspolitik (DIE) - German Development Institute (DIE) ( email )

Tulpenfeld 4
Bonn, 53113
Germany

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