In this third session of the “Central Banks in Turbulent Times” series, Nabil N. El-Hage will host a panel that will bring together Professors David Marsh and Hans Genberg, as well as Dr. Zeti Aziz, former Governor of Bank Negara Malaysia, the central bank of Malaysia.
In this session, Professor El-Hage will discuss the tension that naturally arises when central banks are called upon to have such a prominent role in mid-crisis and post-crisis intervention in their respective nations’ economies. Do too little, and the government exerts sometimes enormous pressure for more to be done to help the failing economy; do too much, and appear to be co-opted to the nation’s elected leadership.
The tension is sometimes exacerbated when political leaders do not fully grasp, or choose to ignore the central bank’s mandate of economic growth with price and financial stability.
Central Banks’ & Commercial Banks’ Response to the COVID-19-induced effects on Asia’s Economies. What Has Been Done? And What More Can be Done?
Asia Financial Crisis… Global Financial Crisis… European Financial Crisis… And Now, COVID-19-induced Global Economic Crisis!
Central banks have played increasingly visible and dominant roles in each of these successive crises. They have repeatedly expanded their respective tool kits, sometimes ahead of their governments’ tacit or explicit agreements.
We now find ourselves in the midst of a global health pandemic, the likes of which the world has not seen since perhaps 1918. And once again, a major part of the burden to stave off a global economic collapse appears to have fallen on…central banks. In a few short weeks, central banks the world over have massively expanded their balance sheets. Quantitative Easing is back in vogue, and in full swing.
Is this all sustainable? Is the world – both financial institutions and operating companies – becoming more – or less – resilient as a result of these interventions? Are financial institutions doing their part, in intermediating in their own economies’ to sustain the economic engines – Is Wall Street helping Main Street weather the storm, or are financial institutions just trying save their own balance sheets?
We will try to address all the above topics and more…
By design, Central Banks are generally able to react and respond faster than the government machinery,
- The more independent they are, the more nimble they can be
Their independence makes them more susceptible to ruffle feathers
- They run the risk of seeing their independence eroded
Central banks are enormously powerful institutions, and some have used that power creatively
- Have they sometimes gone too far?
- Have they taken their eye off the ball? Is Inflation control still one of their primary mandates, and do their aggressive crisis interventions risk igniting bouts of inflation? Or…
- Is this time really different?
Their stakeholders are many; what are the expectations of each of the stakeholders, and what can a central bank do when the various stakeholders’ interests are not aligned to their mandate and goals?
- Their respective elected governments
- Their country’s financial institutions
- Their citizenry
- Sister Central Banks
- Foreign governments
Prof. Nabil N. El-Hage is founder and Chief Executive of AEE International LLC, dba Academy of Executive Education (“AEE”), a company he founded after serving many years on the faculty of Harvard Business School. Our mission is to offer top-quality executive training and coaching to senior executives around the world. Nabil was on the faculty at HBS for nearly ten years, and he served as Professor of Management Practice and as Senior Associate Dean for External Relations. At Harvard, he taught courses in corporate nance, private equity, corporate governance, and real estate.
Nabil has also been appointed Professor of Practice at Asia School of Business in Collaboration with MIT, where he teaches Corporate Finance as well as Ethics & Corporate Accountability.
Nabil is also a seasoned executive, having been CEO of a Private Equity-backed company for nearly a decade and CFO of two public companies.
In the course of his career, Nabil has served on over twenty boards of directors of companies, public and private, large and small. He has served as chairman of the audit committee of NYSE-listed companies and as chairman of the contracts committee of a mutual fund complex.
He currently serves on four boards of directors and two Boards of Advisors, including a property & casualty insurance company and a life insurance company-affiliated $50-billion mutual fund complex.
Professor El-Hage graduated cum Laude from Yale University with a degree in electronic engineering
(1980), and earned his MBA with the Highest Honors, as a Baker Scholar, from Harvard Business School in 1984, where he was awarded the Henry Ford Foundation Award for the Best First-Year academic record, the Loeb-Rhoades Fellowship for Excellence in Finance, the Copeland (Marketing) Award nomination, and a Dean’s Doctoral Fellowship.
Chairman and Co-Founder of OMFIF