Wisdom of a Monetary Board impassively watching over a fast declining capital base
Monday, 16 May 2016
Central Bank’s response is a salutary development
A response issued by the Central Bank (available at: http://www.ft.lk/article/540589/Central-Bank-has-its-say-over--Continuously-loss-making-Central-Bank-is-no-better-than-Sri-Lankan-Airlines- ) to an article published by this writer in this series (available at: http://www.ft.lk/article/539287/Continuously-loss-making-Central-Bank-is-no-better-than-SriLankan-Airlines ) drawing the attention of the top political leaders and the members of the public to continuing losses in the Central Bank has been carried by Daily FT in its edition on May 9, 2016. This is a salutary development and should be promoted by all means. That is because it paves the way for the public to have a productive discussion on the subject and help the government to map out strategies to be adopted to avert a potential crisis in the future. In an economic democracy which this government has committed itself to establish in the country, such intellectual debates are a sine qua non.
Rule of a civilised debate: Honour the opponent
However, it is also essential that such debates and disputations are conducted, as Emperor Asoka had pronounced in one of his rock inscriptions some 24 centuries ago, ‘by duly honouring the opponents in every way on all occasions’. This writer wrote several articles on the question of the central bank incurring losses, making profit transfers to the government when it had made losses and the depletion of the capital base of the bank over the time to critically low levels. These issues were raised with the Monetary Board of the Central Bank since it is the Board which is ultimately responsible for the successes or failures of the institution known as the Central Bank. Since the Board is made up of professionals of high standing, this writer sees no problem in observing the wisdom promulgated by Emperor Asoka when conducting this debate.
Monday, 16 May 2016Central Bank’s response is a salutary development
A response issued by the Central Bank (available at: http://www.ft.lk/article/540589/Central-Bank-has-its-say-over--Continuously-loss-making-Central-Bank-is-no-better-than-Sri-Lankan-Airlines- ) to an article published by this writer in this series (available at: http://www.ft.lk/article/539287/Continuously-loss-making-Central-Bank-is-no-better-than-SriLankan-Airlines ) drawing the attention of the top political leaders and the members of the public to continuing losses in the Central Bank has been carried by Daily FT in its edition on May 9, 2016. This is a salutary development and should be promoted by all means. That is because it paves the way for the public to have a productive discussion on the subject and help the government to map out strategies to be adopted to avert a potential crisis in the future. In an economic democracy which this government has committed itself to establish in the country, such intellectual debates are a sine qua non. Rule of a civilised debate: Honour the opponent
However, it is also essential that such debates and disputations are conducted, as Emperor Asoka had pronounced in one of his rock inscriptions some 24 centuries ago, ‘by duly honouring the opponents in every way on all occasions’. This writer wrote several articles on the question of the central bank incurring losses, making profit transfers to the government when it had made losses and the depletion of the capital base of the bank over the time to critically low levels. These issues were raised with the Monetary Board of the Central Bank since it is the Board which is ultimately responsible for the successes or failures of the institution known as the Central Bank. Since the Board is made up of professionals of high standing, this writer sees no problem in observing the wisdom promulgated by Emperor Asoka when conducting this debate. 