Agustín Carstens: The Innovative Central Banker

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Over a four-decade career at the IMF, Mexico’s central bank and finance ministry, and the Bank for International Settlements (BIS).
Key positions:
- IMF: board member for Mexico, Spain, and Central America (1999); deputy managing director (date not specified in text).
- Mexico: deputy finance minister (2001); finance minister (late 2006); governor of Mexico’s central bank (2010).
- BIS: general manager (first from an emerging market; assumed role in 2017), finishing term at end of June (year implied in context).
Age and personal background:
- Will be 67 years old at the end of his BIS term.
- Born in Mexico City; of German ancestry; educated at Instituto Tecnológico Autónomo de México (ITAM) and the University of Chicago (master’s and doctoral degrees completed in three years beginning in 1982).
Early practical experience:
- Witnessed Mexico’s multiple peso devaluations and nationalization in 1982.
- Worked as a foreign exchange trader and treasurer; updated exchange rates, trading volumes, and reserve levels every half hour during crises.

Crisis responses and policy innovations:
- Participated in managing the 1994 Tequila Crisis, which required a $50 billion bailout organized by the US.
- As deputy finance minister and later finance minister, pushed reforms to strengthen banking, pensions, and energy sectors.
- Advocated precautionary, no-strings IMF lending as deputy managing director; helped bring the Flexible Credit Line (FCL) into being in March 2009.
- Mexico signed the first FCL worth $47 billion in 2009.
Political and managerial skills:
- Won approval of four federal budgets in a minority government as finance minister.
- Described as combining intellectual rigor, pragmatism, and political ability; characterized by a “start-up mentality.”

Innovation Hub creation and objectives:
- Launched under Carstens’ leadership to foster a start-up culture within the BIS and to facilitate collaboration among central banks on technology.
- Appointed Benoît Cœuré to lead the Innovation Hub.
Hub scale and outputs:
- Reached more than 100 employees and seven centers around the world in five years.
- Conducted about 40 projects testing new technologies, from tokenization to using AI to improve economic analysis.
Notable projects and timelines:
- Project Nexus: created a prototype platform to interconnect domestic retail payment systems; governments of India, Malaysia, the Philippines, Singapore, and Thailand are developing it for commercial use by 2027; will allow 500 million people across the five countries to send money back and forth as easily as Americans use Venmo or Brazilians use Pix.
- Project Agorá: tests tokenization within the existing financial system; over 40 financial institutions and leading central banks (including the Federal Reserve Bank of New York, Bank of England, Bank of Japan) joined.
Cultural and institutional impact:
- The Hub mixes macroeconomists with software engineers, blockchain experts, and data scientists.
- Described as “a transformational project in the central bank universe” that “will need time to deliver benefits and change culture.”

Evolving stance on technology:
- Initially skeptical: in 2018 called Bitcoin “a combination of a bubble, a Ponzi scheme, and an environmental disaster.”
- Shifted after 2019 Asia trip, impressed by Singapore’s and Hong Kong SAR’s retail payments, tokenization, and open finance ecosystems.
Monetary policy analysis and recommendations:
- Argued that central banks initially focused too much on the risk of inflation being too low following recent geoeconomic shocks.
- Warned about overreliance on tools that are difficult to adjust, specifically:
- Quantitative easing: “generated a lot of liquidity and expansion but was very difficult to rein in.”
- Forward guidance: should be used more sparsely.
- Recommended relying more on stress scenarios “to better transmit a sense of uncertainty.”
Broader economic diagnosis:
- A 2022 BIS report under his leadership warned about a global shift from low to high inflation and asked “Are we seeing signs of an end to the post–World War II globalization era?”
- Characterized recent developments (pandemic, resurgence of inflation, Russia’s invasion of Ukraine) as signaling structural change in the world economy and international relationships rather than a repeat of 1970s supply shocks.

Four-decade career.
Finished master’s and doctoral degrees in just three years beginning in 1982.
1994 Tequila Crisis required a $50 billion bailout.
Mexico signed the first Flexible Credit Line (FCL) worth $47 billion in March 2009.
Became the first BIS general manager from an emerging market in 2017.
The BIS is “almost 100-year-old.”
The Innovation Hub:
- More than 100 employees.
- Seven centers around the world in five years.
- About 40 projects.
Project Nexus: commercial development by 2027; will allow 500 million people in five countries to send money peer-to-peer.
Project Agorá: over 40 financial institutions and leading central banks joined.
Carstens will be 67 years old at the end of his BIS term.

Agustín Carstens: The Innovative Central Banker — Andreas Adriano, F&D Magazine, June 2025

The Innovative Central Banker
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