title: Banking on the Future: The Fall and Rise of Central Banking
author:  Howard Davies 
description: <b>"Named one of Financial Times (FT.com)'s Books of the Year in Nonfiction Round-Up in the Business &amp;amp; Economics list for 2010"</b><br /><br />"[T]he depth of its analysis will make <i>Banking on the Future</i> an important source of insights for years to come."<b>---Ed Crooks, <i>Financial Times</i></b><br /><br />"The best assessment yet of the role played by the leading western central banks--the U.S. Federal Reserve, the ECB and the Bank of England--in the run-up to the financial crisis and beyond, from two former insiders at the top level of UK policymaker." (<i>Financial Times</i>)<br /><br />"Buy the book with confidence."<b>---Jane Fuller, <i>Financial World</i></b><br /><br />"Books on central banking usually vie with pills as sleep inducers, but <i>Banking on the Future: The Fall and Rise of Central Banking</i> is actually a page-turner."<b>---Andrew Allentuck, <i>National Post</i></b><br /><br />"In this forensic and engaging overview, Susan Hough presents a frank, entertaining and personal review of the history of ideas, practice, personalities and experience in the science of earthquake prediction. Although Hough is a respected scientist, she takes a journalist's viewpoint here, not shying away from legitimate criticism of those she regards as friends, and taking on the credulous at the edge of, or even beyond, the mainstream scientific."<b>---Ian Main, <i>Times Higher Education</i></b><br /><br />"[A] valuable, accessible volume. . . . This clear, nontechnical guide on the present and future of central banking from two eminent policy makers could not have come at a better time." (<i>Choice</i>)<br /><br />"A better title for this book would have been: <i>All You Ever Wanted to Know About Central Banking and More</i>. . . . Davies and Green provide much to inform and interest diverse audiences. . . .[I]t's a book that practitioners and students of central banking need to have on their shelf." (<i>Management Today</i>)<br /><br />"We get an insider's view of the nuts and bolts of central banking, but not so inside that the authors are uncritical. They readily identify the pressure to change regulations or advice when regulators feel under pressure to display expertise in new issues. . . . These are snippets of insight that only critical insiders know how to capture."<b>---Dick Bryan, <i>Australian Review of Public Affairs</i></b><br /><br />"Not long ago, national central banks were endowed with wide-ranging authority, enormous prestige, and a high degree of independence. Today, in the aftermath of the global financial crisis, rethinking their functioning and their modus operandi is both natural and needed. Howard Davies and David Green write on this issue with authority, reflecting their practical experience, political sensitivity, and high analytic skills."<b>Paul Volcker, former chairman of the U.S. Federal Reserve and current chairman of the U.S. Economic Recovery Advisory Board</b>
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  The subject of central banking is very broad and complicated. In this essay I
  will not attempt to examine it in its full spectrum. I rather describe in very
  simple words the main function of central banks, which contrary to what many
  people believe, is to help governments tax their citizens. My reasoning will
  be very simple and requires no knowledge on the part of the reader. Even
  though I have postgraduate studies in economics I am not a specialist, and
  what follows should be only used as a means of enhancing one’s general
  understanding on the subject. In other words the emphasis is on presenting the
  ideas in the simplest possible way, and not to provide academic knowledge.
  Moreover English is not my first language, and you will have to excuse my
  syntax.
  
  
  
  
  
  As I already mentioned, central banks are mainly a means of taxation. They are
  also a means of speeding up or slowing down an economy, but they were mainly
  invented to help governments finance their defici