International Standards and the Role of Central Banks in Global Financial Governance

Abstract

The formal arrangements for the governance of international monetary and financial crises have remained reasonably stable over the past 40 years, but the identity of the leading actors, has changed. Over this period, the role of the largest central banks – first and foremost, the US Federal Reserve (Fed), currently the most important central bank due to the international role of the US dollar, the European Central Bank (ECB), the Bank of England (BoE), the People’s Bank of China, and the Bank of Japan – has increased substantially. Unlike the situation with other global governance actors, there are no obviously applicable international standards to guide central bank conduct.

This policy brief discusses the implications of this development and recommends standards that should be used to guide central banks in their global governance activities.