Bank on this: the Centre for Central Banking Studies
In 1990, a casual discussion between Eddie George, the then Governor of the Bank of England, and his successor, Mervyn King, laid the foundations for what has become the most international forum for central bankers in the world.
Since its foundation as the Centre for Central Banking Studies (CCBS), more than 17,800 delegates from 173 central banks have participated in events in London or overseas. Distinguished alumni of the CCBS include several current Governors or Deputy Governors.
Aside from the development and delivery of training, its core function is to develop the comparative study of the constitutions, functions and methods of operation of central banks. It acts as a focal point for requests from overseas for training and technical assistance, and co-operates with external organisations inside and outside the United Kingdom in delivering training and technical assistance both in central banking and banking and financial services more generally.
In its early years, the CCBS fulfilled a demand from central banks in former communist countries for assistance in setting up central banking operations in evolving market economies. It responded to a unique opportunity to transfer knowledge to these countries whilst fostering a network of central banks worldwide. In 1991, the CCBS ran five courses for Central and Eastern European (CEE) central banks and one for central banks from former Soviet Union (FSU) countries. In addition, it ran a special course for central banks from Commonwealth countries, one for the People’s Bank of China and one for EC countries.
By the end of 1992, representatives from 90 countries had already taken part in courses in London.
From these origins as a centre to provide training primarily for central banks in Eastern Europe and the FSU, the CCBS has evolved into a global forum for the exchange of ideas. In 2007, representatives from 137 central banks took part in CCBS courses.
“The motivation behind the CCBS is not simply to promulgate Bank of England practice – though of course there is a lot of interest in that – but to compare the models from all central banks around the world and to promote the sharing of knowledge and best practice,” says Gill Hammond, director of the CCBS. “The courses are very interactive – selected participants are invited to present papers – and vigorous discussion is encouraged.”
The language of banking
In addition to the programme of seminars in London, the CCBS also engages in a substantial overseas programme. Each year it conducts about 30 events abroad, attended by around 120 central banks. Some are regional events attended by several neighbouring central banks, others are dedicated to a specific central bank. One such annual seminar is held for the People’s Bank of China, for which all the course materials are translated into Mandarin.
In many cases, the overseas programme proves more cost-effective for delegates from around the world; more importantly, it enables the CCBS to tailor courses to the particular needs of the host central bank.
With events in Europe, Asia, Africa, North and South America, and its Handbooks in Central Banking translated into Spanish, Russian and Arabic, the CCBS is indeed truly global. The fact that the Handbooks – available free from the CCBS website – attract more than 50,000 downloads every quarter demonstrates the appetite for central bank training around the world.
The Bank of England is seen as a leader in terms of modelling, inflation targeting and financial stability, and several other central banks around the world have adopted the Bank of England’s approach. CCBS personnel are frequently consulted about projects by participants and colleagues in other central banks, particularly in the field of model building and forecasting in monetary policy.
In 2004, for example, two advisors from the CCBS helped Banco Central de Guatemala build a small macro model of the Guatemalan economy for use in forecasting and monetary policy. The CCBS advisors provided feedback on research into modelling conducted at the central bank, including advice on how models could be used to produce forecasts.
In 2003, an adviser from the CCBS spent four months in Iraq, assisting in setting up the country’s new central bank. Key tasks included the establishment of a currency that the Iraqi population could trust, a stable exchange rate, and sound central and commercial bank laws that would prevent monetary financing and support monetary and financial stability.
The CCBS has also provided training to Syria as part of a broader mission to help develop markets in the country. In Iran it aided the Government in opening up the banking market and in the development of a government bond market. In Libya, the CCBS advised on the reformation of the country’s central bank. The Centre provided advice on the Monetary Policy Committee processes in Colombia and Mauritius, liquidity forecasting in Lithuania and financial stability in Malta.
The CCBS also works with other organisations and trade conferences, from working with the West African Institute for Financial and Economic Management to taking part in the Lord Mayor of London’s trade delegations.
At the frontiers of central banking
Since its inception, the CCBS has placed considerable emphasis on academic research related to all topics of central banking. One of the most successful early projects surveyed 94 central banks to investigate which type of monetary policy frameworks had been most successful in achieving low inflation and whether this was the case in both industrialised and developing and emerging economies.
However, the main focus for the CCBS and the Bank of England is on applied research. “We are particularly interested in cross-country studies; we evaluate different bank models and approaches to central bank functions. One of the Centre’s major aims is to capture and disseminate the lessons learned from country case studies,” says Ms Hammond.
The Centre continuously raises the technical level of events by broadening participation beyond practicing central bankers. Each year it runs a special seminar open only to central bank economists, and it regularly invites financial academics and market participants to contribute to events.
The CCBS also fields senior Bank of England staff at its London events. It is not unusual for the Governor to visit a seminar, or for members of the Bank’s Monetary Policy Committee to take part in monetary policy courses. Such participant diversity and high-level expertise has ensured that senior central bankers from around the world are keen to participate in the CCBS programme.
Central banks are unique institutions that face common challenges. While each central bank must focus on its domestic monetary and financial stability, the increasing integration and globalisation of the world’s markets means that shocks in one economy can be rapidly transmitted around the world. The CCBS is part of a long tradition in the Bank of England of co-operation and interaction with other central banks, which aims to promote international monetary and financial stability in the face of this global challenge.
The need to work together to develop and share best practice is as great as ever. The CCBS will continue to promote research and facilitate debate among central bankers, working and thinking at the frontiers of central banking.