Preface vii
Abbreviations ix
Introduction 1
Chapter One: What Is Central Banking and Why Is It Important? 9
Chapter Two: Monetary Stability 23
Chapter Three: Financial Stability 52
Chapter Four: Financial Infrastructure 90
Chapter Five: Asset Prices 115
Chapter Six: Structure, Status, and Accountability 141
Chapter Seven: Europe: A Special Case 182
Chapter Eight: Central Banking in Emerging Market Countries 212
Chapter Nine: Financial Resources, Costs, and Efficiency 236
Chapter Ten: International Cooperation 252
Chapter Eleven: Leadership 270
Chapter Twelve: An Agenda for Change 285
Afterword 297
Notes 301
Index 317

An inside look at the role and future of central banking in the global economy
The crash of 2008 revealed that the world's central banks had failed to offset the financial imbalances that led to the crisis, and lacked the tools to respond effectively. What lessons should central banks learn from the experience, and how, in a global financial system, should cooperation between them be enhanced? Banking on the Future provides a fascinating insider's look into how central banks have evolved and why they are critical to the functioning of market economies. The book asks whether, in light of the recent economic fallout, the central banking model needs radical reform.
Supported by interviews with leading central bankers from around the world, and informed by the latest academic research, Banking on the Future considers such current issues as the place of asset prices and credit growth in anti-inflation policy, the appropriate role for central banks in banking supervision, the ways in which central banks provide liquidity to markets, the efficiency and cost-effectiveness of central banks, the culture and individuals working in these institutions, as well as the particular issues facing emerging markets and Islamic finance. Howard Davies and David Green set out detailed policy recommendations, including a reformulation of monetary policy, better metrics for financial stability, closer links with regulators, and a stronger emphasis on international cooperation.
Exploring a crucial sector of the global economic system, Banking on the Future offers new ideas for restoring financial strength to the foundations of central banking.

Howard Davies is director of the London School of Economics and Political Science. Previously, he was chairman of the United Kingdom's Financial Services Authority and deputy governor of the Bank of England. David Green has worked for almost forty years as a central banker and financial regulator, principally at the Bank of England and the Financial Services Authority. Davies and Green are the authors of Global Financial Regulation.