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Protecting What Matters: Reflections on a Central Bank’s Role at Times of War

By: Iris H-Y Chiu and Alan H. Brener



This Article explores the important and multifaceted roles of a central bank in extraordinary times of crisis such as war, focusing on the National Bank of Ukraine (NBU) and its responses in the face of the Russian invasion of Ukraine which began on February 24, 2022. During a time of martial law, institutional preservation and legitimacy can be threatened, but preserving these very institutional tenets is important in defending the nation under siege and in securing future restoration and rebuilding.

In this light, we examine the NBU’s difficult and conflicting choices in three respects: providing war finance, preserving banking and financial systemic stability, and catering for citizens’ financial welfare. The navigation of these difficult and conflicting objectives by the NBU reflects the challenges for its institutional preservation and legitimacy. However, we also argue that there is a role for international solidarity with the NBU, in relation to European central banks concerned with the financial needs of Ukrainian refugees abroad, and the network of central bankers in the Financial Stability Board.

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