This paper is a copy of the author’s Per Jacobsson Lecture given at the University of Zurich on an occasion hosted by the Bank for International Settlements on Sunday June 27th, 2004. It is reproduced with the kind permission of the Per Jacobsson Foundation.

No abstract is available.

A central bank will usually be primarily concerned about three aspects of stability. These are the maintenance of:- (1) domestic price stability, (2) external stability of the value of the currency, and (3) overall systemic stability in the financial system. These three objectives are not, of...

The 1994/95 Hilldale Lecture in Social Studies delivered at the University of Wisconsin in Madison, Wisconsin, November 10th, 1994.

China’s financial system has been undergoing major reforms during the last decade, with the aim of establishing a modern commercial banking system and the development of stock market(s). In recent years there have been large capital injections into ailing state-owned banks, and currently...

During recent decades most financial crises were caused by excessive public-sector expansion. The current Asian crisis, however, had its roots in private-sector over-expansion. In this respect it had more in common with the pre-1914 crises. In this paper we compare and contrast these two sets of...

The second half of AUgust 1998 was dominated by two events. From 14 to 28 August the Hong Kong Monetary Authority (HKMA) intervened in the Hong Kong equity markets to prevent a speculative double play against their currency board. On 17 August Russia announced its default on sovereign bonds....

Owing to lags in the transmission mechanism of monetary policy, central banks put much weight on forecasts of the future paths of output and inflation. So there has been considerable recent interest in forward-looking Taylor-type reaction functions. Using publicly available data on the Monetary...

The purpose of this paper is to assess the choice between adopting a monetary base or an interest rate setting instrument to maintain financial stability. Our results suggest that the interest rate instrument is preferable, since during times of a panic or financial crisis the Central Bank...