Central Banking Technical Assistance to Countries in Transition
Front Matter

Front Matter

Editor(s):
Susana Almuina, Ian McCarthy, Gabriel Sensenbrenner, and Justin Zulu
Published Date:
December 1995
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    © 1994 International Monetary Fund

    Cover design: IMF Graphics Section

    Composition and page design: Alicia Etchebarne-Bourdin

    Cataloging-in-Publication Data

    Central banking technical assistance to countries in transition : papers and proceedings of meeting of donor and recipient central banks and international institutions / edited by J.B. Zulu … [et. al.]. — [Washington, D.C.] : Monetary and Exchange Affairs Dept., International Monetary Fund, [1994] p. cm.

    ISBN 1-55775-446-2

    1. Banks and banking, Central — Baltic States — Congresses. 2. Banks and banking, Central — Russia (Federation) — Congresses. 3. Banks and banking. Central — Former Soviet republics — Congresses. 4. Technical assistance — Baltic States — Congresses. 5. Technical assistance — Russia (Federation — Congresses. 6. Technical assistance — Former Soviet republics — Congresses. I. Zulu, Justin B., 1934- II. International Monetary Fund. Monetary and Exchange Affairs Dept. HG3139.6A7C46 1994

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    Contents

    Foreword

    Under a Group of Seven mandate, 23 central banks agreed to cooperate with the International Monetary Fund to provide intensive central banking technical assistance to the Baltic countries, Russia, and other countries of the former Soviet Union beginning in 1992. The Monetary and Exchange Affairs Department of the IMF serves as the coordinating agency for this program, with the support of the Bank for International Settlements (BIS). Under this arrangement, the cooperating central banks1 routinely release their professional staff to participate in technical assistance missions in central banking topics assigned to them. Coordinating meetings are held twice a year at the BIS in Basle and are attended by the deputy governors (or their equivalent) of the cooperating central banks and chaired by the Deputy Managing Director of the IMF.

    The Monetary and Exchange Affairs Department organized the special Joint Meetings on Central Banking Technical Assistance in St. Petersburg, Russia, on April 13-15, 1994. The joint meetings were chaired by the then Deputy Managing Director of the IMF, Richard D. Erb, and were hosted by the Central Bank of the Russian Federation. The meetings brought together, for the first time, representatives of the cooperating central banks, the central banks of the Baltic countries, Russia, and other countries of the former Soviet Union, and the major multilateral financial institutions. These meetings were the first occasion on which the donors and recipients of central banking technical assistance met to review the technical assistance progress and commit resources for further assistance.

    The joint meetings provided a forum for the donors and the recipients of technical assistance to share their thoughts, their strategies, and their experiences. The meetings resulted in an increased realism on the part of donors and recipients as to the effectiveness of technical assistance and the rate of progress. The scope of the problems faced and the need for perseverance were acknowledged. The importance of efficient coordination was also appreciated, as was the central role of the IMF.

    On substance, the joint meetings highlighted the importance of the central bank in facilitating the transformation of the economies of the Baltic countries, Russia, and other countries of the former Soviet Union into market economies and the linkages between technical assistance in central banking and the programs supported by the IMF. They also emphasized the need to keep the ultimate objective in sight, namely, that the reform of central banks was designed to help promote conditions for growth and economic and financial stability and was not an end in itself.

    The statements, which constitute the main body of this publication, were prepared by the participants to make the joint meetings more productive by having their thoughts down on paper in advance. Kazakhstan, the Kyrgyz Republic, Moldova, Ukraine, and Russia prepared the written statements on accounting, foreign exchange operations, monetary operations, payments system, and banking supervision, respectively. The 15 recipient central banks prepared statements on the content and delivery of technical assistance, while the cooperating central banks and the multilateral organizations provided statements from the vantage point of donors. Staff of the Monetary and Exchange Affairs Department prepared the paper on “The Role and Independence of a Central Bank” to reflect the broad variety of experience of the IMF’s membership in these important matters. The paper provides detailed information on important issues in central banking, including a comparative sample of 31 countries. The arrangements concerning such issues as the size and the composition of the policymaking board, the role of the central bank in monetary and exchange rate policy, resolution of conflict between the central bank and the government, public accountability, relations with the markets, and credit to the government can differ in important respects. The differences testify to the fact that the role and independence of a central bank is very much a contextual matter that reflects to a large extent the IMF membership’s political and economic arrangements.

    I want to take this opportunity to thank Galina Klementieva and her staff at the Support Foundation of the International Banking Congress in St. Petersburg, Russia, Dmitry Zubarev and Sergey Petrov, Svetlana Miroshnichenko, Svetlana Zhurkovskaya and Irina Osochenko. It was a special privilege to work with Mrs. Klementieva and her team; her experience, energy, and organization were invaluable. I also wish to thank Andrei Braguin, Victor Khalansky, and Nadezhda Savinskaya, senior staff of the Central Bank of the Russian Federation in Moscow and the St. Petersburg Branch, for their key role in the organization of the joint meetings.

    I am grateful to V. Sundararajan, Ian S. McCarthy, Susana Almuina, Erna Radifera, and Joanne Colbourne, staff from the Monetary and Exchange Affairs Department, who worked with me on the St. Petersburg joint meetings, for their dedication and invaluable support. Editorial assistance for the publication of these proceedings was provided by Jennie Lee Carter and Esha Ray of the External Relations Department.

    The success of the St. Petersburg meetings owes much to the strong commitment and enthusiasm of the participants and organizers. This publication provides a lasting record of the historic event.

    J. B. Zulu

    Director

    Monetary and Exchange Affairs Department

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