Post Global Financial Crisis: Issues and Challenges for Central Banks of Emerging Markets

The subprime crisis had affected many economies, including those of the SEACEN region. Various measures to deal with both liquidity and solvency measures were taken by both the central banks and the relevant authorities. These included marrying micro- and macro- prudential measures of financial stability. Past financial crises have also demonstrated that the fragility of the financial system and uncertainties may last for some time after the initial stage of the systemic financial crisis. Consequently, any consideration for a transition strategy to phase out the current stimulus macro-economic policies must be carried out with a clear priority to be compatible with the emerging domestic and international economic environment. In the ever changing financial landscape, amidst business and credit cycles and financial fragility, central bankers need to critically access how best to implement monetary policy and financial sector measures and also to examine the possibility of synergies and tradeoffs between them. This paper takes stock and attempts to analyse the above set of challenges facing the emerging markets¡¯ central banks during the post-global financial crisis, with particular interests to review the issues from the perspectives of the SEACEN central banks.