Commentary
Minority of central banks altered risk functions in past two years
Amendments emanate from factors including technology and climate change
Few central banks lack risk management strategies
Two respondents do not have a risk strategy and slightly more lack a defined risk tolerance
GRC systems remain scarce among central banks
Minority of central banks project adoption this year, others aim to upgrade
Most heads of risk management units report to governor or board
Risk management committees are more likely to exist in central banks than chief risk officers
Risk management units are most often centralised
Operational risks are the most covered area across participating jurisdictions
Central banks adapt forecasts with financial sector and other changes
Host of changes to modelling incorporate financial channels, nuanced expectations and more
Inflation forecast errors moderate after surge in 2022
But growth forecast errors are higher in 2023, data shows
High income central banks allocate most time to research
Research economists are more numerous and are allotted more research time in high income jurisdictions
Administrative data tops list as alternative data source
Research and forecasting remain key areas of application for central bank economists
Economists’ rate of access to centralised data services still below par
Central banks in high-income jurisdictions still have more access
Most heads of research are responsible for sign-off on research
Peer-reviewed papers remain most-used metric for measuring research success
Central banks average 11 working papers over the past year
Just over a quarter of central banks run research blogs
Central banks prioritise inflation dynamics research
Middle income institutions tend to have much widest research interests
Time series model is top tool for forecasting and research
Use of machine learning models for research purposes surges year on year
Economic growth and inflation are most-forecast variables
Private debt, commodity prices and market interest rates rank as laggards
Most new economic staff hired as fresh graduates
Recruits from private sector, academia make up smaller portion of new hires
Proportion of central bank economists with PhD rises
Central banks split on funding economic staff with PhD aspirations
Median salary of central bank economists rises as inflation bites
Income remains less aligned with GDP per capita of participating countries
Economics department staff total just over 70 on average
Average number of research economists remains smaller than policy economists
AI adoption still limited among central bank economists
High income countries report slightly higher impact but most say practical use of AI is minimal
Middle income countries recall highest volume of worn banknotes
High income jurisdictions remove notes with the highest average value
Banknote recycling remains limited at most central banks
Just a few institutions track carbon footprints of banknotes
Banknotes rarely portray current monarchs or presidents
Central banks favour other historical figures, but few institutions feature people from minority groups
Covid-19 impact on cash demand minimal in past year
Majority of currency departments relax pandemic countermeasures