Central Bank Governance and the Role of Nonfinancial Risk Management
IMF Working Papers, February 23, 2016
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Bibliographic details
- Authors: Ashraf Khan
- Published: February 23, 2016
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781498376051.001
Core argument and scope
- Nonfinancial risk management is an essential element of good governance of central banks.
- The paper provides a funnelled analysis, based on selected literature, by:
- (i) presenting an outline of central bank governance in general;
- (ii) zooming in on internal governance and organization issues of central banks;
- (iii) highlighting the main issues with nonfinancial risk management; and
- (iv) ending with recommendations for future work.
- The paper shows how attention for nonfinancial risk management has been growing, amplifying the call for better governance of central banks.
- It stresses that in the area of nonfinancial risk management there are no crucial differences between commercial and central banks: both have people, processes, procedures, and structures.
- It highlights policy areas to be explored.
Major findings on governance and internal organization
- Central bank governance is outlined in general terms (see analysis in paper).
- Internal governance and organization issues of central banks are examined in detail (see analysis in paper).
Main issues with nonfinancial risk management
- The paper highlights the principal issues with nonfinancial risk management at central banks (see analysis in paper).
- Emphasis on similarities between central banks and commercial banks in managing nonfinancial risks (people, processes, procedures, structures).
Recommendations and future work
- The paper ends with recommendations for future work and highlights policy areas to be explored (see concluding section in paper).
Subject classification and keywords
- Subjects: Banking; Central bank governance; Central bank risk management; Central banks; Financial regulation and supervision; Financial sector policy and analysis; Financial sector stability; Internal audit; Operational risk; Public financial management (PFM)
- Keywords include: A. central bank independence; aggregate risk appetite statement; central bank; central bank activity; central bank decision-making; central bank FMIs; central bank governance; central bank governance issue; Central bank risk management; central banks bank run; company; financial risk; Financial sector stability; Global; governance issue; government; Internal audit; operational risk; policy area; policy independence; risk culture; risk management; transfers profits; WP