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This paper argues that nonfinancial risk management is an essential element of good governance of central banks. It provides a funnelled analysis, on the basis of 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. It shows how attention for nonfinancial risk management has been growing, and how this has amplified 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.

Risk management. --- Banks and banking, Central --- Banker's banks --- Banks, Central --- Central banking --- Central banks --- Banks and banking --- Insurance --- Management --- Management. --- Banks and Banking --- Finance: General --- Public Finance --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Central Banks and Their Policies --- Public Administration --- Public Sector Accounting and Audits --- General Financial Markets: Government Policy and Regulation --- Banking --- Financial services law & regulation --- Management accounting & bookkeeping --- Finance --- Operational risk --- Central bank governance --- Internal audit --- Financial sector stability --- Financial regulation and supervision --- Public financial management (PFM) --- Financial sector policy and analysis --- Central bank risk management --- Financial risk management --- Auditing, Internal --- Financial services industry --- United States

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This paper describes how behavioral elements are relevant to financial supervision, regulation, and central banking. It focuses on (1) behavioral effects of norms (social, legal, and market); (2) behavior of others (internalization, identification, and compliance); and (3) psychological biases. It stresses that financial supervisors, regulators, and central banks have not yet realized the full potential that these behavioral elements hold. To do so, they need to devise a behavioral approach that includes aspects relating to individual and group behavior. The paper provides case examples of experiments with such an approach, including behavioral supervision. Finally, it highlights areas for further research.

Financial services industry --- Banks and banking, Central. --- Services, Financial --- Service industries --- Banker's banks --- Banks, Central --- Central banking --- Central banks --- Banks and banking --- State supervision. --- Risk management. --- Banks and Banking --- Public Finance --- Industries: Financial Services --- Business and Financial --- Microeconomic Behavior: Underlying Principles --- Intertemporal Consumer Choice --- Life Cycle Models and Saving --- Central Banks and Their Policies --- Financial Institutions and Services: General --- Corporate Finance and Governance: Government Policy and Regulation --- Law and Economics: General (including Data Sources and Description) --- Illegal Behavior and the Enforcement of Law --- Corporate Culture --- Diversity --- Social Responsibility --- Marketing and Advertising: Government Policy and Regulation --- Personnel Economics: Compensation and Compensation Methods and Their Effects --- Cultural Economics --- Economic Sociology --- Economic Anthropology: General --- Cultural Economics: Religion --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Taxation, Subsidies, and Revenue: General --- General Financial Markets: Government Policy and Regulation --- Debt --- Debt Management --- Sovereign Debt --- Banking --- Public finance & taxation --- Financial services law & regulation --- Legal support in revenue administration --- Financial regulation and supervision --- Financial sector --- Government debt management --- Revenue --- Law and legislation --- Debts, Public --- United States

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This paper constructs a new index for measuring de jure central bank independence, the first entirely new index in three decades. The index draws on a comprehensive dataset from the IMF’s Central Bank Legislation Database (CBLD) and Monetary Operations and Instruments Database (MOID) and weightings derived from a survey of 87 respondents, mostly consisting of central bank governors and general counsels. It improves upon existing indices including the Cukierman, Webb, and Neyapti (CWN) index, which has been the de facto standard for measuring central bank independence since 1992, as well as recent extensions by Garriga (2016) and Romelli (2022). For example, it includes areas absent from the CWN index, such as board composition, financial independence, and budgetary independence. It treats dimensions such as the status of the chief executive as composite metrics to prevent overstating the independence of statutory schemes. It distills ten key metrics, simplifying current frameworks that now include upwards of forty distinct variables. And it replaces the subjective weighting systems relied on in the existing literature with an empirically grounded alternative. This paper presents the key features of the new index; a companion, forthcoming paper will provide detailed findings by country/region, income level, and exchange rate regime.

Banking --- Banks and Banking --- Central bank autonomy --- Central bank legislation --- Central bank mandate --- Central Banks and Their Policies --- Central banks --- Currency crises --- Currency --- Deflation --- Economic & financial crises & disasters --- Economics of specific sectors --- Economics --- Economics: General --- Exchange rate arrangements --- Foreign Exchange --- Foreign exchange --- Government policy --- Inflation --- Informal sector --- Macroeconomics --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Monetary Policy, Central Banking, and the Supply of Money and Credit: Other --- Price Level --- Price stabilization --- Prices

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We develop a stylized balance sheet framework to help identify ‘quasi-fiscal’ components of central bank crisis interventions and show how sources of fiscal risk are created from both the new claims and how they are funded. Combining central bank balance sheet data with survey evidence from intervention announcements, we document the risks to the public sector balance sheet from central banks’ interventions in response to the Covid-19 crisis, including non-conventional lending to the financial and non-financial sectors and large-scale purchases of government securities. Case study analysis indicates that management of fiscal risks from central bank crisis interventions varies greatly across countries, although several good practices can be identified.

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This paper examines key considerations around central bank digital currency (CBDC) for use by the general public, based on a comprehensive review of recent research, central bank experiments, and ongoing discussions among stakeholders. It looks at the reasons why central banks are exploring retail CBDC issuance, policy and design considerations; legal, governance and regulatory perspectives; plus cybersecurity and other risk considerations. This paper makes a contribution to the CBDC literature by suggesting a structured framework to organize discussions on whether or not to issue CBDC, with an operational focus and a project management perspective.

United States --- Banks and Banking --- Finance: General --- Money and Monetary Policy --- Industries: Financial Services --- Public Finance --- Money Supply --- Credit --- Money Multipliers --- Central Banks and Their Policies --- Monetary Policy --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Taxation, Subsidies, and Revenue: General --- Distributed ledgers --- Banking --- Monetary economics --- Finance --- Public finance & taxation --- Central Bank digital currencies --- Currencies --- Payment systems --- Digital currencies --- Technology --- Money --- Financial markets --- Legal support in revenue administration --- Revenue administration --- Financial services industry --- Technological innovations --- Banks and banking --- Clearinghouses --- Revenue