Central Bank Governance and the Role of Nonfinancial Risk Management

Ashraf Khan

No 2016/034, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; central bank; risk management; government; company; financial risk; central bank governance; operational risk; risk culture; policy independence; aggregate risk appetite statement; governance issue; central bank decision-making; A. central bank independence; transfers profits; central bank activity; central bank governance issue; central bank FMIs; central banks bank run; policy area; Internal audit; Financial sector stability; Central bank risk management; Global (search for similar items in EconPapers)
Pages: 51
Date: 2016-02-23
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Citations: View citations in EconPapers (5)

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