Importance of Sound Central Bank Governance

Central Bankers and Audit Partners Convene at Hawkamah-IMF Central Bank Governance Forum

Dubai, UAE: In an era marked by unprecedented economic challenges and technological innovation, the role of central bank governance in ensuring price and financial stability has never been more critical, according to central bankers and IMF officials.

The importance of central bank governance is underscored by a range of critical issues in the evolving landscape being shaped by emerging developments in artificial intelligence, Central Bank Digital Currencies, virtual assets, initiatives in green finance, and the implications of climate change. The central bank Board has a fundamental role in ensuring sound oversight with the aid of essential support structures such as adequate access to experts, sound audit processes, self-evaluation mechanisms and increasingly sophisticated board secretariats that underpin good governance. These elements collectively highlight the need for robust governance practices within central banks.

Mr. Bernard Lauwers, Director of the IMF Finance Department noted that “we see room for improvement in strengthening governance at central banks in the context of an increasingly complex global environment with macro-level issues such as economic uncertainty, regulatory change, and rapid technology development. Central banks Governors, Deputy Governors, and Board members have an important role to play in helping to shape the resilience and sustain the credibility of their institutions.”  Commenting on the significance of the Forum, Dr. Ashraf Gamal El Din, CEO of Hawkamah remarked that “this year’s Forum stood out for its focused and practical approach in addressing the most pressing governance issues on the agenda of central banks’ Boards. This accomplishment is credited to the distinguished participants and exceptional speakers facilitating valuable exchanges of insights and experiences”.  

Ms. Yan Liu, Deputy General Counsel of the IMF Legal Department added “while innovation including in the payment sector offers opportunities, central banks need to be attentive to the impact on governance issues such as the scope of regulatory and oversight functions and powers. Sound legal frameworks are crucial to ensure robust central bank governance in the digital world.”

Hawkamah, the Institute of Governance and the International Monetary Fund (IMF) brought together around 100 central bankers and their external auditors from 40 countries in the Middle East, Africa, Central Asia, South Pacific, Europe, and Caribbean to share experiences and discuss governance issues affecting central banks at the eighth High-Level Central Bank Governance Forum held in Dubai.