Current Global Economy - Challenges in Central Banking

The perception of central banking worldwide has been deeply affected by the subprime crisis. This crisis can be a turning point in the discussion on objectives, tools and some institutional arrangements in relation to central banking. This paper seeks to set recent events in the context of the wider perspective – asking about the most important challenges in the functional, operational and institutional spheres of central banking. It is widely argued that there is a need for a fundamental rethink of what is the role of central banks in stabilization of financial systems. And this may be crucial for modification of central bank's objectives. While reforming central banking one has to take into account that central banks must now operate in a new, global and much more complex environment