The international dimensions of central bank objectives

The main conceptual object of this study is the ‘’objectives of central banks’’ and their position and relation to the various core characteristics of central banks, inter alia, central bank governance, mandates, functions, central bank cooperation. The core research hypothesis is that the objectives of central banks are formulated and shaped by both domestic and international developments. The research consists of two parts: Part I (general part: chapters 1 and 2) and Part II (case studies: chapters 3 and 4). As cases studies in this research are presented one multijurisdictional central bank (the European Central Bank) which is one of the essential constituents of the European Economic and Monetary Union (EMU) and the Bank for International Settlements, the oldest international financial organisation in the world which has as a statutory objective to promote central bank cooperation from its establishment. Chapter 1 aims to provide an answer to the question “what is a central bank?” ‘’what terminology is used to describe such an institution?’’ What other terms are closely associated with central banking activities? Emmett in 1909 stated: ‘’It is far easier to describe the workings and advantages of a central bank than to define it.’’ This chapter examines which is the most adequate way to define a central bank (its objectives or functions) and presents a novel combined approach based on three sources (central bank websites, international texts, and literature). Chapter 2 presents the dynamic nature of central banking on a national and international level, having as a guiding light the objectives of a central bank. The research questions in this chapter are: What is the mandate concept in central banking? What and which are the central bank objectives and how they are connected to the mandate? What central banks do from an international standpoint to better fulfil their objectives? Chapter 3 will examine the ECB as a case study and deal with the following issues: what are the objectives of the ECB? Who decides the implementation and interpretation of the objectives? Are there any objectives that have not been properly explored by literature and are in practice now? Which international developments affected the interpretation of the ECB’s mandate to include climate change considerations? Chapter 4 examines a further case study, namely the BIS. The main questions that are attempted to be answered are: What is the BIS? How has the BIS promoted central bank cooperation? How the BIS evolved from mainly a European organisation to a genuine international organisation? What and which are the BIS hosted committees? What is the Basel Process?