The role of the central bank has become a subject of intense debate in the wake of the recent global financial crisis. In this volume, experts and policy makers discuss what lessons we can draw by examining the evolution of the central bank over the past two centuries.

Throughout their long history, the primary concern of central banks has oscillated between price stability in normal times and financial stability in extraordinary times. In the wake of the recent global financial crisis, central banks have been given additional responsibilities to ensure financial stability, which has sparked intense debate over the nature of their role. Bankers and policy makers face an enormous challenge finding the right balance of power between the central bank and the state. This volume is the result of an international conference held at Norges Bank (the central bank of Norway). International experts and policy makers present research and historical analysis on the evolution of the central bank. They specifically focus on four key aspects: its role as an institution, the part it plays within the international monetary system, how to delineate and limit its functions, and how to apply the lessons of the past two centuries.

Advance praise: ´This book makes for fresh reading at an important juncture, as the economic recovery weakens, while some central banks begin to exit from unprecedented crisis-response policies. We live in unchartered territory, and it helps to gain a better historical perspective of central banking and the challenges these institutions face. This book should provide the basis for debate and the development of next-generation central bank policies.´ Angel Gurría, Secretary-General of the Organisation for Economic Co-operation and Development