More than 90 central bankers and their external auditors from 50 countries in the Middle East, continental Africa, Central Asia, South Pacific, Europe, and North America, were brought together by the Hawkamah Institute for Corporate Governance, and the International Monetary Fund, IMF, to share experiences and address pressing governance issues affecting central banks at the two-day Central Bank Governance Forum.

"The global financial crisis has radically changed the size, composition and risk characteristics of central banks' balance sheets. Central banks now yield enormous discretionary power to intervene in financial markets through QE (Quantitative Easing) and unconventional monetary policy, with a wide mandate and objectives encompassing both price stability and financial stability. These structural changes require reform in the governance arrangements of central banks, new institutional design to constrain the use of authority and a heightened emphasis on accountability, disclosure and transparency," said keynote speaker and governance expert Dr Nasser Saidi, at the forum held at the Dubai International Financial Centre.

Commenting on the significance of the forum, Dr. Ashraf Gamal El Din, CEO of Hawkamah said, "Addressing central bank governance is important for Hawkamah as the industry they oversee represents a major driver in all economies, which is particularly true in the Middle East and North Africa. How the banks and their regulators are governed is an important component of Hawkamah’s work."

The event marks the third Central Bank Governance Forum jointly organised by Hawkamah and the IMF. The first forum, in 2013, focused on leading practices in risk management and external audit oversight. The second, in late 2014, focused on audit oversight and assurance mechanisms.

This year’s forum focused on a closer review of key governance bodies, i.e., central bank boards and audit committees, including their independence, expertise and efficacy in performing their roles to ensure appropriate "cheques and balances". A key objective of the forum was to explore how central banks are adapting their governance structures and institutional arrangements to provide for greater autonomy and independent oversight of operations.

Simon Bradbury, Chief Accountant of the IMF noted that the forum was a resounding success. "The discussions among participants were rich and engaging, and the event provided a good platform to exchange ideas on good governance practices and indications were that the expanding mandate of central banks places further demands on the key governance bodies."

Dr. El Din added, "Central banks need to look into their own governance and decision making structures to make sure that they lead by example. The key components of good governance such as responsibility, accountability, fairness, and transparency must be seen at all times in central banks as good examples to follow. Strategy formulation and risk management need to be updated regularly in order to respond to new challenges and the new realities."

Other topics examined during the forum included the evolving governance arrangements of central banks globally and the role of the board, oversight challenges and prominence of audit committees, scope of risk management within the context of central banks, interaction and alignment of assurance functions, external audit quality and enhancing international standards, internal audit and its importance as third line of defence, symbiotic relationship between governance enablers within central banks, and legal underpinnings of sound central bank governance.