2018 Michel Camdessus Central Banking Lecture Series: Managing Director's Opening Remarks
IMF News, September 6, 2018
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- Authors: Christine Lagarde
- Published: September 6, 2018
Overview
- By Christine Lagarde, IMF Managing Director
- IMF HQ, Washington, DC
- September 6, 2018
- Occasion: the fifth Michel Camdessus Lecture—IMF signature lecture series on the role of central banks.
- Purpose: welcome and introduce the Governor of the Central Bank of Russia, Elvira Nabiullina, as the speaker.
Opera and Central Banking (Analogy and Framing)
- Central banking compared to opera as a "rich" and "complex" art form requiring mastery of many disciplines.
- Emerging market central banks face a relatively higher share of challenges—from evolving policy frameworks to more frequent external shocks.
- Clear public communications are key to ensuring policy actions are well-understood and to ensure legitimacy.
- Clearly defined central bank mandates are critical—likened to broad "musical themes"—but there is no detailed "sheet music" to follow; central banks must "write their own music" and adapt in real time.
Challenges in Emerging Markets (Findings and Risks)
- Greatest near-term threat to global growth: risk that trade and geopolitical tensions intensify, with adverse effects on confidence, asset prices, investment, and growth.
- Additional pressures for emerging economies:
- Stronger dollar and tightening of financial conditions as advanced economies normalize exceptional and unconventional monetary policies.
- Lower capital inflows and rising costs of finance.
- Testing of policy frameworks of some emerging market central banks.
- IMF response: supporting members through advice and, in some cases, financing.
- Domestic challenges for emerging market central bankers:
- Less developed financial systems.
- Banking system clean-up and consolidation (example: Russia), which can weaken monetary policy transmission.
- Need to build credibility and anchor inflation expectations while managing potentially competing policy objectives.
Striking the Right Tone (Leadership, Experience, and Institutional Reforms)
- Elvira Nabiullina's background and leadership:
- Former Deputy Minister of Economy in the early 2000s; championed deep economic reforms.
- Chief executive of Russia’s largest commercial bank.
- Served as Minister of Economy—shaped Russia’s response to the global financial crisis.
- Advisor to the President before becoming head of the Central Bank of Russia.
- Central Bank of Russia under Elvira Nabiullina:
- One of the largest central banks in the world, with 7 main branches and 74 divisions, and operations that span 11 time zones.
- Moved to a fully flexible exchange rate and an inflation targeting regime to help cushion external shocks.
- Noticeably strengthened the bank’s public communications.
- Result: inflation expectations in Russia today are better anchored, and at lower levels, than they were only a few years ago.
- Consolidation of banking sector: revoking more than 400 banking licenses and upgrading regulation and supervision of the financial sector.
- Recognition: named ‘central bank governor of the year’ by Euromoney (2015) and The Banker (2017).
Concluding Remarks and Expectations
- Tribute to leadership qualities: character, intuition, and leadership likened to great opera conductors.
- Anticipation of Elvira Nabiullina’s lecture on monetary policy, central banking, and Russia’s experience.
- Planned engagement following the remarks: conversation about major challenges facing today’s central banks.
Source: 2018 Michel Camdessus Central Banking Lecture Series: Managing Director's Opening Remarks