Bank of Jamaica headquarters in Kingston BANK OF Jamaica governor Derick Latibeaudiere on Monday told central bankers gathered in Jamaica for their annual conference that their credibility relied on guaranteeing the "soundness of the theoretical foundations on which monetary policy is based".
At the opening of the 32nd regional Conference of the Caribbean Centre for Monetary Studies at the Jamaica Conference centre Mr. Latibeaudiere said: "My experience over the years has made it clear to me that in the final analysis, the effectiveness of the Central Bank is directly related to the soundness of the theoretical foundations on which monetary management is based."
The conference was not open to the public but his statement added: "Consequently, our aim as economists and researchers must always be to guarantee the soundness of the theoretical foundation for monetary policy in the region."
The central bank governor said: "Ultimately, the credibility of the policies we pursue and our own professional credibility will depend on how well we succeed. This success will not only be reflected in the strength and stability of our economic institutions but also in the well-being of our citizens and the protection and preservation of our social and natural environment."
Below is the edited highlights of the text.
"For us at the Bank of Jamaica as well as for me personally, the opportunity to host such a representative group of monetary policy researchers is a special honour which is made even more significant by the fact that this week the Bank of Jamaica launches its 40th Anniversary celebrations. The annual CCMS Conference is a tribute to the regional collaborative effort and a clear indication that regional initiative can work.
From its beginnings as the Regional Programme for Monetary Studies, The CCMS, sponsored by the Central Banks of the region in collaboration with the University of the West Indies and the University of Guyana, has nurtured the development of research in monetary policy issues. The annual conference is a major outcome of these efforts.
The research work presented at these conferences has over the years sought to interpret and explain the various economic challenges that have confronted the Region and to clarify the nature of our macro-economic conditions. Substantive challenges remain, but over the years, the research issued have taken on new and added dimensions.
We have analysed and studied issues such as the growth and development of economic institutions, the need to develop sound financial institutions, maintain sustainable external accounts, manage debt, attract and manage foreign capital, develop domestic capital markets, facilitate macroeconomic stability, and the necessity to achieve and maintain low inflation.
We have also debated the fixed versus flexible exchange rate regimes and the currency board versus central bank arguments. A lengthy debate on dollarisation beckons. The experiences of the countries represented here have informed the depth of the analyses and discussions at these forums.
Discussions
The theme of this year's Conference is "Central Banking in the Caribbean in the 21st Century." Indeed, these discussions are very timely as the region as a whole seeks to improve the soundness of the financial systems and strives to devise sustainable and realistic monetary and exchange rate policies in an uncertain global financial environment.
In recent years with the rapid liberalisation and globalisation of the world economy, monetary and exchange rate policy issues have attracted increasing attention and research both here in the Caribbean as well as in many other countries.
The research efforts have been intensified by the threats to the financial system and the crises that emerged in the 1990s. Some of the research that has been done relates to practical issues that confront the daily operations of monetary management in many of our countries and I must therefore thank those of you who have made contributions in this area.
As we move into the new millennium much remains to be accomplished. As central bankers and economies we recognise that there will always be challenges related to the operations of financial markets. We will therefore be continuously confronted with the challenge of minimising these problems.
But the normal challenges of financial market operations are now compounded by the challenges created by the rapid progress of technology, which in the present global environment generates opportunities but produces many risks for financial markets. With the inter-linkages in the world economy, the region's financial system will increasingly be affected by the changes that are continuously emerging as a result of the unceasing innovations in technology.
Our analysis and understanding of the inherent risks associated with these developments cannot be far behind.
My experience over the years has made it clear to me that in the final analysis, the effectiveness of the Central Bank is directly related to the soundness of the theoretical foundations on which monetary management is based. Consequently, our aim as economists and researchers must always be to guarantee the soundness of the theoretical foundation for monetary policy in the region.
Ultimately, the credibility of the policies we pursue and our own professional credibility will depend on how well we succeed. This success will not only be reflected in the strength and stability of our economic institutions but also in the well-being of our citizens and the protection and preservation of our social and natural environment."
