The Role of the Central Banker Today

I propose to discuss some of the principal functions of the central banker as I see them, and some of the main problems with which he is confronted today and which he seems likely to face in the future. What I shall say is essentially based on my own experience in Canada in recent years. I ask you to bear this in mind because I would not wish to jeopardise my friendly relations with my central banking colleagues in other countries by pretending to talk for them. In saying this I have in mind my colleagues both in the highly industrialised countries and in the developing countries, some of whom I have had the pleasure of seeing regularly at meetings of the governors of the central banks of the American continent and at Commonwealth gatherings. The role of the central banker is necessarily greatly influenced by the system of government, by the stage of economic development, and by the organisation of financial markets; indeed, in underdeveloped countries, which are chronically short of capital, a great deal of the effort of the central banker may in fact be devoted to improving the structure of financial institutions so that the maximum amount of domestic savings may be mobilised for economically constructive purposes and the pressures for inflationary financing of development thereby reduced.