In 2005, the Bank for International Settlements (BIS), the ‘central bankers’ bank', celebrated its seventy-fifth anniversary. To mark the occasion, the BIS also organised an academic conference on the theme of past and future central bank cooperation. This volume contains the proceedings of that conference. A distinguishing feature is its interdisciplinary character, with contributions from economists, historians and political scientists as well as some eminent policy makers.

The book contains six chapters, as well as an introduction by Piet Clement. Clement stresses that the book deals primarily with central bank cooperation in action, not with the desirability of cooperation, ‘How did/does it operate? What has it achieved? Under what circumstances has it been successful or not? What are the main factors fostering or hampering cooperation?’ (p. 2). For the future, he foresees a widening (a larger geographical coverage) and a deepening of central bank cooperation – in the sense that central bank cooperation will have to become more closely aligned with political and economic cooperation, especially to strengthen its democratic legitimacy.

The first chapter, by Claudio Borio and Gianni Toniolo, discusses ‘One hundred and thirty years of central bank cooperation: a BIS perspective’. With 60 pages, it is by far the longest chapter. It is, to a significant extent, based on the study by Toniolo, Central Bank Cooperation at the Bank for International Settlements (Cambridge University Press, 2005, with the assistance of Clement), which was presented at this BIS anniversary conference. However, the book stops in 1973, the end of the Bretton Woods system. This chapter further extends the history until 2005, with a high degree of consistency. It focuses on three key questions: ‘How did changing international monetary and financial conditions shape the targets and tools of central bank cooperation? What conditions determined its intensity? Did a structured organization, such as the BIS, make a difference?’ (p. 17). One of the key ideas put forward by Borio and Toniolo is that the collapse of Bretton Woods contributed significantly to a shift in the objectives of central bank cooperation. With floating exchange rates, increasing capital mobility and financial liberalisation, cooperation shifted away from monetary stability towards financial stability. This also contributed to a broadening of the scope of the BIS, both functionally and geographically.

The second chapter, entitled ‘Almost a century of central bank cooperation’, by Richard Cooper, covers largely the same topic as the first chapter. But I found it not to have the same depth as the chapter by Borio and Toniolo, and it does not really bring new perspectives.

In chapter 3, the focus is on financial stability, with a contribution by Ethan Kapstein, entitled ‘Architects of stability? International cooperation among financial supervisors’. Kapstein concentrates on financial stability issues and international regulatory cooperation over the last few decades. He argues that the different (Basel) agreements on the financial regulatory architecture were not only the result of cooperation between regulators, with the objective of reducing systemic risk, but also of pressure by private institutions, to achieve a ‘level playing field’. In an interesting section, ‘Charting the new risk environment’, he argues, in the conclusion, that ‘legislators and publics be educated about the contemporary risk environment before the next crisis occurs’ (p. 152).

In the fourth chapter, Alexandre Lamfalussy brings a thoughtful essay on ‘Central banks, governments, and the European monetary unification process’, very much based on his experience from 1994 to 1997 as the first president of the European Monetary Institute (EMI), the predecessor of the European Central Bank. As observed by Lamfalussy, this was a rather special period, as there were no major conflicts between governments and central bankers, due to an ‘exceptional convergence of several facts and influences’ (p. 157). This contributed to give the EMI a crucial role in the preparation for Economic and Monetary Union, especially in the elaboration of the changeover scenario. Lamfalussy further analyses the EMU policy mix and argues in favour of strengthening the ‘E-leg’. However, he puts less emphasis on the need for macro-policy coordination (as advocated in his contribution to the Delors Report), but stresses the need to accelerate micro- or supply-side reforms.

In the fifth chapter, Beth Simmons discusses ‘The future of central bank cooperation’. She observes that ‘central bank cooperation has adapted remarkably well to demands of the times’ (p. 208), something which she attributes to the problem-oriented nature of central bankers. She argues that the future of central bank cooperation is least certain in the area of exchange rates and monetary policy coordination, mainly because this can entail serious domestic consequences. Like Kapstein, she sees an important role for central banks in financial stability issues. She considers Asia, especially China, as the ‘most significant’ future challenge for the central bankers.

In the last essay, ‘Interdependence and cooperation: an endangered pair?’, Tommaso Padoa-Schioppa concentrates on ‘the philosophy, or perhaps the ideology, of interdependence and cooperation’ (p. 211). He focuses on the ‘house in order’ doctrine, which assumes that as long as each individual country gets its own fundamentals right, the international economic and financial system will not need much formal cooperation. However, Padoa-Schioppa argues that international policy cooperation is inevitable, given the broadening and deepening of cross-border interdependence. In a globalised world, he concludes, ‘unlimited national autonomy does not exist any longer’ (p. 219) and ‘sovereignty can in fact be regained – rather than lost – when delegating tasks to supranational forums and institutions’.

All in all, for a collection of essays, this is a fairly homogeneous volume. It offers a valuable insight into the world of central bank cooperation, both past and future, and how the past is shaping the future. It also shows very well the concerns, voiced among the conference participants and in the central banking community, about financial fragility, even if the present crisis is threatening to surpass the visions of even the most pessimistic doomsayers.