Module 1: Foundations of Central Banking
Key Topics
- Evolution of central banking
- Purpose and functions of central banks
- Central bank mandates
- Central bank independence
- Price stability
- Monetary stability
- Financial stability
- Currency issuance
- Banker to government
- Banker to commercial banks
- Lender of last resort
- Central bank balance sheet
- Central bank governance
- Accountability and transparency
- International central banking models
The BIS identifies core central-bank functions that commonly include providing state money and core payment infrastructure, supporting monetary stability and acting as lender of last resort, while recognizing that mandates differ between jurisdictions.
Practical Exercise:
Compare the institutional mandates and functions of three central banks.
Module 2: Monetary Economics & Monetary Policy
Key Topics
- Money and monetary aggregates
- Inflation and deflation
- Interest rates
- Monetary transmission mechanisms
- Monetary-policy objectives
- Policy interest rates
- Open-market operations
- Reserve requirements
- Standing facilities
- Central-bank lending
- Quantitative easing
- Quantitative tightening
- Forward guidance
- Inflation expectations
- Exchange-rate considerations
- Monetary-policy credibility
- Policy communication
The Federal Reserve describes monetary policy as influencing financial conditions and interest rates in pursuit of its statutory objectives, while the Eurosystem’s primary objective is price stability.
Simulation:
Participants form a simulated Monetary Policy Committee and analyse economic conditions before deciding on a policy response.
Module 3: Macroeconomic Analysis for Central Banks
Key Topics
- GDP and economic growth
- Inflation indicators
- Employment and labour markets
- Fiscal policy
- Balance of payments
- Current-account developments
- Exchange rates
- Money supply
- Credit growth
- Interest rates
- Commodity prices
- External-sector developments
- Economic cycles
- Leading indicators
- Economic forecasting
- Scenario analysis
- Global economic shocks
Practical Exercise:
Prepare a Central Bank Governor’s Economic Briefing based on a simulated country’s economic data.
Module 4: Central Bank Operations & Financial Markets
Key Topics
- Money markets
- Interbank markets
- Government securities markets
- Foreign-exchange markets
- Repo markets
- Open-market operations
- Central-bank lending facilities
- Standing facilities
- Collateral frameworks
- Reserve balances
- Liquidity management
- Yield curves
- Market liquidity
- Monetary-policy implementation
Current BIS analysis identifies open-market operations and lending facilities as tools serving monetary-policy implementation, financial stability and payment-system functions.
Practical:
Conduct a simulated open-market operation and analyse its effect on banking-system liquidity.
Module 5: Central Bank Balance Sheet, Foreign Exchange & Reserves
Key Topics
- Central bank balance sheet
- Assets and liabilities
- Currency in circulation
- Commercial-bank reserves
- Government deposits
- Foreign-exchange reserves
- Gold reserves
- Special Drawing Rights
- Reserve adequacy
- Foreign-exchange intervention
- Exchange-rate management
- Reserve valuation
- Central bank capital
- Financial risks of central banks
- Reserve portfolio principles
The ECB, for example, manages foreign reserves with liquidity, security and return as its stated order of objectives.
Practical:
Analyse a simplified central-bank balance sheet and construct a basic foreign-reserve allocation.
Module 6: Central Bank Payment & Settlement Systems
Key Topics
- Central bank money
- Payment-system architecture
- RTGS systems
- Retail payment systems
- Instant payments
- Clearing and settlement
- Settlement finality
- Payment-system liquidity
- Securities settlement
- Cross-border payments
- Payment-system oversight
- Financial market infrastructures
- Payment-system risks
- Digital payments
- Central bank digital currency
The BIS identifies payment-system safety and efficiency as an important central-bank responsibility, while the Eurosystem operates and oversees major payment and securities-settlement infrastructures.
Semester I Applied Project
CENTRAL BANK ECONOMIC & MONETARY POLICY BRIEF
Participants prepare a professional policy brief covering:
Macroeconomic Conditions β Inflation β Growth β Exchange Rate β Financial Markets β Liquidity β Monetary Policy Options β Policy Decision β Communication Strategy