A generation ago, central bankers were hidden behind a shroud of secrecy, but now, with so much public interest in the economy after the global financial crisis in the early 2000s, they have now gone from nerds to cool.
At least that was how Central Bank Governor Jwala Rambarran described the evolution of the post yesterday as he gave a prelude to English monetary economist Prof Paul Mizen’s lecture at Central Bank Auditorium, Port of Spain, on Thursday night on the role of central banks over the next 50 years.
“A decade ago, the central banker was a secretive, mousy character—nerdish almost—who spoke about complicated things no one knew or, quite frankly, cared about.
“Now in 2014, as the world struggles to recover from the worst global economic crisis in generations, central bankers have been bestowed with quite a different status,” he said.
The last six years have shown the world the fortitude and value of central banks, he said, which have moved from the shadows and dusty vaults to the guardians of economies.
“My take on this is that sometimes central banks are the only option for politicians. It is our jobs, our business to be experts and immerse ourselves in monetary policy, as the life savers in navigating the swirling financial waters. It is perhaps best we are the only game in town. At the same time, we must avoid unreasonable expectations about what a central bank can—and cannot— achieve. Monetary policy cannot solve deeper structural problems or lift an economy’s growth potential,” Rambarran said.
He further noted that in Trinidad and Tobago the implosion of the biggest insurance company also coincided with the global crisis, rocking the local economy.
“It hurt our financial system and five years later we are still trying to put the pieces back together again. The CLICO crisis tested the ability of the Central Bank and continues to test us to this day. This was one ugly event I have vowed to do all in my power to ensure it is never repeated. The Central Bank’s top projects under my watch revolve around this goal. From legislative to regulatory, to supervision and financial education and promoting financial inclusion, the Central Bank is ensuring it is doing all that it can to safeguard the financial system and the economy,” he said.