New Central Bank Governor outlines his plans

Newly-appointed Central Bank Governor Dr. Indrajit Coomaraswamy yesterday assumed office. Here are excerpts of his speech to the staff of Central Bank after taking office:

It’s a great privilege and honour to be here with you as the Governor of the Central Bank of Sri Lanka

The Central Bank of Sri Lanka is one of the great institutions in this country and I am acutely aware a primary responsibility, arguably ‘the’ primary responsibility of the Governor is to uphold his reputation and credibility.

I will assure you, that I will do my utmost to do so at all times. Of course, I cannot do this on my own. I need the cooperation of each and every one of you to maintain this as one of the great institutions in the country.

My parents went abroad when I was about 11 years old. So, I had much of my secondary and university education abroad. As I was doing my degree and thinking of what I should do in the future because I was abroad most of the time, but I did come every year for my summer holidays so kept in touch with Sri Lanka. There was no doubt in my mind as to what my career should be, and that was to be a staff member of the Central Bank of Sri Lanka.

The Central Bank had such an awesome reputation in the 1970s. If you think of the iconic figures that had been in the Central Bank staff, they are legendary figures in the country. I don’t want to mention any names, because I might miss some out. But you just look back at the history of the Central Bank and you would see some great names, people who have made massive contributions to this country.

So I wanted to be part of that also and I came back and started life as a probatory staff officer of the Central Bank.

When I was working for the Commonwealth Secretariat almost for 20 years as Dr. Nandalal said obviously one travels around, as there are 54 member states of the Commonwealth. I’ve been to many countries and invariably in various occasions when you are introduced and I was always introduced by saying I started my career in the Central Bank of Sri Lanka and that was a great source of pride to be able to say that I started my working life in this institution. And I continued to be enormously proud that I was a part of this great institution for 15 years.

In a way it is like coming in the full cycle, it is like coming back home after a long absence and it is a great privilege and honour to be able to come back.

Of course I am deeply indebted to the President for appointing me as the Governor of the Central Bank. I am also indebted for the Prime Minister and Finance Minister for supporting my appointment. I very much hope that I will be able to fulfil the trust they have reposed in me.

When I met President he just told me one thing. He said: “Do your work in a straight way and do not fear anybody in discharging your duties.” Now my intention is to follow his direction and to carry out my functions according to his wishes.

When I met Prime Minister he laid out his vision of where he wants to take this country and there is a big role for the Central Bank. And in many ways, if we are not able to fulfil those functions in the way it should be fulfilled, in terms of creating a platform for macroeconomic stability with strong macroeconomic fundamentals, having financial sector stability so, there is confidence right through the system, nothing else is possible. 

That is the first step to get strong macro fundamentals, to have the financial sector which is the lifeblood of the country stable and people within the country and outside having confidence in it. So that’s our responsibility.

As I said, I genuinely believe nothing else will really take off unless we are able to do our job or fulfil our functions well. So, we have a big responsibility and I look to all of you, for your assistance and cooperation in doing this.

As the Deputy Governor mentioned, I did play a little bit of sports in my youth and one of the lessons that I learnt, the key lesson probably, is that ‘captain is only as good as his team’. However, smart or clever the captain is unless his team has talent and there is team work it is not going to work.

Now having been through the process myself, I know how Central Bank recruits its people. It is able to draw on the best people in the country. So in front of me, I know there is enormous talent.

The important thing though, is talent alone is not enough. We need to be absolutely together for that talent to bear fruit to contribute to the development of this country.

We need to work as one and we need to have common objectives. Not all of us are going to be fond of each other, that’s human nature; but we need to be professional enough to put those things aside and to achieve our common objectives.

There are number of important things that need to be done.

It is only 48 hours since I knew about this appointment, which is been a surprise as well. So, I am not as prepared as I would like to be before I came before you. But I would be certainly talking to the Deputy Governors, senior management and eventually to the Monetary Board to work out what we need to do and may be at that point I will speak to you again to share with you on what we have to do in the next three months, the next year, next three to five years we need to think through.

As I said the Central Bank really has to set the tone, to set the framework for everything else to happen.

I don’t want to go on for too long, I just want to leave three thoughts on you as to what the Central Bank in my view should be imbued with, what the culture should be.

One is clearly integrity; two is technical excellence and three is professionalism.

I would like those three concepts to be the guiding principles for all of us, as we go forward. 

And if any of you think that I am not living up to those principles, please find your way to getting that message to the 15th floor that I personally am not living up to those three principles.

In terms of leadership that’s important. I need to be able to set an example and I’m going to do my best to do so. And if there are any short comings as I said, I would like to hear.

I want to encourage a culture of discussion, of debate, of openness, so please help me to do that. It should never be personal. If somebody has a different opinion we need to put our heads together. We will have different views, we need to throw it out in the open, discuss and then eventually find the best way forward.

There is always concern about the balance between politics and economics. In my view for much of our post-independence here; I’m not putting on one party or the other or one Government or the other, but if you look back from 1948, for most of the time politics has trumped economics.

It is our job to convince our politicians that good economics is good politics.

As the Central Bank, we need to get away from this cycle of ‘stop go policies’ of creating artificial booms through misaligned policies. We need to set a good framework for the economy as I said before.  

We have representative democracy. People elected the Government of course have sovereignty reposed in them.

However, the Monetary Law Act sets out some very specific responsibilities for the Central Bank and it is up to us to fulfil those responsibilities in a very technocratic, objective and free way. That is not to say we should be criticising the Government of the day; that’s not our business. But there are channels through which we can get independent advice to the Government.

I am very keen and I have spoken to our leaders about this that the Central Bank does its work independently and in a technical way and discreetly advises the Government about what we think is the best way forward. For those segments of policy and practice for which the Central Bank has responsibility. So I need your cooperation.

Thank you very much!