It is with great pleasure that I welcome you on the 3rd Central Banking Executive Programme, which we are delighted to be delivering at Brasenose College, University of Oxford in early September.
The programme is organised at Oxford by the Association for Research on Banking and the Economy, a UK-registered educational charity, in association with the Centre for Banking, Finance and Sustainable Development. This year the programme also benefits from collaboration with the Fanhai International School of Finance at Fudan University, and the China Institute of Economics and Finance at Fudan University.
Macroeconomics and monetary economics are currently undergoing a revolution: Many experts have realized that the models and theories used for the past 50-or-so years have been insufficient: The recent experience of banking crises has shown that important factors had been neglected. Capital adequacy-based bank regulation has not performed well. Moreover, the latest research indicates that interest rates work differently from the way conventional theories assume. Many experts now agree that banking needs to be at the heart of macroeconomic models and policy deliberations, and it needs to be properly understood how banks operate. Also, models that do not assume equilibrium appear more in line with the empirical evidence. Very high East Asian economic growth had in fact been based on a different paradigm in economics, one that recognised disequilbrium and credit creating banks and that deserves a reconsideration in the light of the latest empirical findings.
The 3rd programme is being held in England at a time when the UK government has called for a new appreciation of the importance of industrial policy. Long neglected as allegedly being unnecessary (as unregulated markets were supposed to deliver the best outcomes), other governments have also concluded that the fictional theoretical models within which no industrial policy is necessary have little to do with the reality that top-level decision-makers are facing.
The Central Banking Executive Programme is unique in that it is designed specifically for central bankers, high-level policy-makers, including at government ministries, as well as selected senior finance professionals from the private sector. The programme provides participants with a comprehensive understanding of the challenging issues involving government economic policy, monetary and fiscal policy, the banking system in the post-2008 world, and policies to create sustainable, stable and inclusive economic growth and prosperity. We are confident that the rewards from completing the programme will be substantial. These will be derived, not only from an enhancement of your understanding of most important and challenging issues on central banking, but also from the development of a strong network of senior international contacts at the programme.
We are pleased to introduce you personally to a leading group of experts who will present and engage with you on the programme. Expert presenters include Professor Kern Alexander (Cambridge and Zurich universities and one of the co-authors of the Basel II framework at the BSBC), Dr James Forder (Vice-Master, Balliol College, Oxford), the leading expert on central bank independence, credibility and transparency policies, Professor Charles Goodhart (LSE), the Bank of England’s leading central bank and monetary economics expert, Charles Haswell, former adviser to the chairman of HSBC and leading expert on bank regulation policy, Baron Karl-Theodor zu Guttenberg, a former senior government minister and political star from Germany who is leading a strategic policy and advisory think tank in New York and Professor Dariusz Wójcik (Oxford University), a top expert on international financial centres, in addition to fellow central bankers from Hungary and Japan, who will speak about their experience with very challenging circumstances. You will have the chance to meet these leading lights, discuss with them, benefit from their insights – and often join them for lunch or dinner at Brasenose College.
The programme also features my work, which includes my original proposal for a new monetary policy in the mid-1990s, when I was chief economist of an investment bank in Tokyo, which I called “Quantitative Easing”. It will feature my policy design to boost domestic growth quickly without extra government expenditure, by simply switching the public sector funding method (“Enhanced Debt Management”). And of course it will feature the first empirical tests I conducted in the 5000-year history of banking on hitherto widely disputed but crucial details about how banks actually operate and fund their loan extensions. It turns out that no prior savings are needed for banks to fuel business investment through their lending. Moreover, in my latest empirical research, published in a top-rated peer-reviewed journal, I demonstrate that foreign investment, including FDI, does not actually boost economic growth of the receiver country. Instead, domestic bank credit policies determine and can significantly enhance economic growth and deliver sustainable and stable prosperity for all.
As participants, you too will play an important role in the success of the programme. Contextualising the programme material in the day-to-day experiences of participants is an integral ingredient of the Central Banking Executive Programme. Active participation and discussion, where participants can draw on each other’s experiences, will be encouraged and facilitated by lecturers.
I look forward to seeing you in early September up at Oxford.
Professor Richard A. Werner, Programme Director
Central Banking Programme 2019 PDF Download