Central Bank Of GCC Research Paper Example | Topics and Well Written Essays - 1750 words

Central Bank Of GCC - Research Paper Example However, the central bans differ in terms of those who formulate the monetary policies. In European Central Bank, monetary policies are formulated by the General Council while in GCC Central Bank the monetary policy should be formulated by the Governing Board. Those who argue against the GCC Central Bank suggest that the bank it affects the independence of the GCC member countries while those who support it suggest that the bank will promote economic stability in the GCC region. The main objective of the GCC is to develop monetary policies and implement them. GCC members have been intending to create a monetary union since 1980s. So far, significant efforts have been made towards that end. Economic integration is becoming real by the day, and the use of a single currency is almost becoming a reality as well. Currently there is an interregional movement of goods and services, labour and capital. Establishment of a common market in 2008 further improved the efforts of the GCC towards a unionized monetary system (Fasano-Filho & Schaechter, 2003). Most of the convergence criteria for entry into a unionized monetary system have also been attained. However, the main challenges for the GCC in its push to develop a single central bank for the region have been the decision of the required exchange rate for a single currency and the location of the central bank (Boero et al, 2011). There have also been significant disagreements concerning the structure of the new central bank. The suggested GCC Central Bank should have a clear organisational structure which will determine how decisions are made and how such decisions are implemented. This enables the GCC Central Bank to set clear roles and responsibilities for various members of the Bank and to ensure that the right decisions are made at the right time for the benefit of all member countries of the GCC. This report suggests that the GCC central bank should have an executive board responsible for general