<abstract xmlns="http://www.w3.org/1999/xhtml"> This paper aims to provide some insights into the way that the recent referendum held on June 23rd about the Brexit could affect the UK’s perspective to proceed to a new round of QE. Moreover, the effects of the latter on the Eurozone are under scrutiny. Transmission channels of the shock that the Brexit has brought about on the EU and the Eurozone, as well as possible scenarios about the future relationship between the UK and the EU are presented. To the best of our knowledge, this is the first academic piece of work that makes a direct link between the consequences of the Brexit on decisions about proceeding in further QE actions or not in the UK and at the same time studies how this could result in affecting the Eurozone’s economy and its decision-making about adopting further unconventional policies.</abstract>

The Relation of Brexit with the UK’s QE Decisions and its Impact on the Eurozone

<abstract xmlns="http://www.w3.org/1999/xhtml"> In this paper we perceived causal relationship between loyalty, satisfaction, quality of the alternatives, investment size, and new media through online word of mouth in banking services in Montenegro. Obtained empirical results substantiated validity of the set hypothetical frame, i.e. meaningfulness of the conceptual model that is set.</abstract>

Loyalty, Investment Model and New Media - A Correlation Study in Banking Services in Montenegro

<abstract xmlns="http://www.w3.org/1999/xhtml"> This paper is the result of the author`s many years of multidisciplinary research in the areas of quality management and operational risk management. The main focus of the research is aimed at strengthening the model of the “three lines of defence” in terms of more efficient management of operational risks - those that arise as a result of inadequate and unsuccessful processes and systems, human factors, as well as those that can appear as a result of external events. The strengthening of the three lines of defence model is brought about through the synergy of quality management principles, the principles of risk management, and the total quality management approach. In essence, the term strengthening may be interpreted as a process of continual improvement. Business operations based on the principles of quality management and risk management allow central banks to be able to continuously improve their overall business performance. The principles of quality management contain properly aligned and matched best solutions from current management theory and practice. Designed to work together - and this essentially means in a consistent, synchronized and synergistic manner, the principles are translated into a series of requirements and guidelines of international standards suitable for implementation. Through their synergy, the principles of quality management and risk management, as well as approaches to total quality management form a clear, applicable and sustainable paradigm of successful management of central banks. Incorporation of the principles of quality management in central bank systems and processes would significantly strengthen the three lines of defence, in terms of efficient operational risk management, which this paper aims to show in a clear and comprehensive manner. Although any central bank is a specific institution, all the principles of quality management and risk management can be applied to its operations. In addition to the numerous and highly significant benefits and synergistic effects that the application of quality management and risk management principles bring to central banks, what should also be highlighted is their impact on a new way of thinking regarding successful central bank governance, which generates a new attitude towards its responsibilities, objectives, employees, and the environment. A new way of thinking produces new behaviours and an improved business culture and can ensure the sustainable success of central banks and other financial system entities. Bearing in mind that the process of risk management is an integral part of the working of central banks, the most effective results are achieved when the “process owner” is also the “risk owner”. This paper shows that the integration of these two roles contributes to the full effectiveness and efficiency of the processes and risks management. It is clearly demonstrated that this unity of the roles, along with a quality culture, a risk culture, and risk-based thinking is embedded in all management processes - from defining policies, objectives, and plans, all the way to their operational implementation and that this ensures the fulfilment of requirements, needs, and expectations of customers and other relevant stakeholders. In all of this, the management of any central bank plays the most important role, not only because of the importance and complexity of the issues in question, but also because of their full responsibility to manage risks in a proper, effective, conscientious and dedicated manner, as that is the key precondition for achieving sustainable success. </abstract>

Strengthening the Three Lines of Defence in Terms of More Efficient Operational Risk Management in Central Banks

<abstract xmlns="http://www.w3.org/1999/xhtml"> In recent years there has been a particular interest in the relation between exchange rates and interest rates both in developed countries and emerging countries. This is understandable given the important role that these variables have in determining the movement of nominal and real economic variables, including the movement of domestic inflation, real output, exports and imports, foreign exchange reserves, etc. To realized the importance of the given instruments selected macroeconomic indicators, data analysis (monthly data) relating to Serbia was made on the basis of the Transfer Function Model, a data analysis (annual data) relating to emerging countries was done on the basis of the Stepvise Multiple Regression model. In the transfer function model we used the Maximum Likelihood method for assessing unknown coefficients. In the gradual multiple regression model we used the Least Square method for the evaluation of unknown coefficients. All indicator values were used in the original unmodified form, i.e. there was no need for a variety of transformations. Empirical analysis showed that the exchange rate is a more significant transmission mechanism than the interest rate both in emerging markets and Serbia.</abstract>

Exchange Rate and Interest Rate in the Monetary Policy Reaction Function

<abstract xmlns="http://www.w3.org/1999/xhtml"> Notwithstanding the rapid growth in the popularity of and the increasing number of research papers on macroprudential policy, the general public still has a relatively unclear perception of this concept. The main purpose of this paper is to explain briefly the most important concepts related to macroprudential policy and describe its objectives. Emphasis is put on explaining the main stages of a macroprudential cycle, the relationship between macroprudential policy and other economic policies, and the costs and benefits of macroprudential regulations.</abstract>

A Brief Introduction to the World of Macroprudential Policy

<abstract xmlns="http://www.w3.org/1999/xhtml"> The paper investigates and compares the performance of the Indian public sector banks (PSBs) based on revenue maximising efficiency in the deregulation period from 2001-02 to 2012-13. Several efficiency estimates viz., overall technical efficiency, pure technical efficiency and scale efficiency of individual banks are calculated using Data Envelopment Analysis (DEA). The empirical findings indicate the presence of managerial and scale inefficiencies in the operation of the most of the PSBs. Applying the Tobit regression analysis, the paper also assesses the impact of different environmental factors, like profitability, the level of non-performing assets, size etc. on the efficiency of PSBs. It is observed that banks with high profitability, low level of non-performing assets, and relatively larger size are more technically efficient.</abstract>

An Analysis of Revenue Maximising Efficiency of Public Sector Banks in the Post-Reforms Period

<abstract xmlns="http://www.w3.org/1999/xhtml"> This study deals with influence of globalization on the economic aspect of the media. Financing the media and the issue of ownership over them represents the fundamental framework on which basis the media work and direct their editorial policy. Principle position implies that owners of the media use power of media to promote their economic, political, cultural and other stances. A particular issue, especially in European countries in transition, represents the financing of public service, as a socially beneficial good. Many commercial media, on the basis of their financial and political power, are trying to diminish or discredit the power and role of the public service. Former socialist countries, now countries in transition, seek from their national budgets to maintain this kind of informing, that is, the public interest, education and promoting cultural values. The era of globalization brought, as one of its negative traits, the domination of profit over culture, education, and even over the right to have quality informing. So the mass media have become a sort of hostage of confrontation of different political and economic interests, which reflects on the quality of media content that strive towards sensationalism, advertocracy, tabloidization. Based on the case study of Montenegro, as a country in transition, the development of mass media is shown, including their financing, ownership structure, and profit.</abstract>

The Financial-Economic Aspect of the Media and the Public Service in the Globalization Era (Budget and Ownership Framework)

<abstract xmlns="http://www.w3.org/1999/xhtml"> Most of the international trade today takes place through transnational corporations that have changed its structure and directions of activity. The scope of international transactions that occur within transnational corporations is increasingly replacing the classical cross-border forms of import and export of goods and services.The transition process and the opening of Montenegro towards the rest of the world has had its influence on significant inflows of foreign direct investments and the presence of a large number of companies controlled by foreign capital. If we neglected the sales data of foreign corporations’ affiliates we would attain a distorted picture of the position of Montenegro in international trade. Through the analysis of the application of FATS statistics, which monitor the operations of these companies in Montenegro, we discovered the economic variables to which the foreign affiliates have made the greatest contribution. Our goal is to assess the benefits of Montenegro’s participation in international trade. The focus of the work is on the calculation of the export of Montenegro through the application of this new statistical concept.</abstract>

Agency for the Construction and Development of Podgorica,

University of Belgrade, Faculty of Economics,

An Analysis of International Trade of Montenegro Using Statistics on the Operations of Transnational Corporations’ Affiliates

BOOK REVIEW: „Monetary Policy, Inflation, and the Business Cycle: An Introduction to the New Keynesian Framework and its Applications“, Princeton University Press, Second Edition, 2015, by Jordi Galí

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Journal of Central Banking Theory and Practice

 The Journal of Central Banking Theory and Practice is a scientific and professional journal that the Central Bank of Montenegro publishes thrice a year. The journal has been published since 2012. The most stringent international standards are followed in the publication of papers and reviews which imply "double-blind" review.Journal of Central Banking Theory and Practice is a scientific journal dedicated to publishing quality papers and disseminating original, relevant and applicable economic research. Scientific and professional papers that are published in the Journal of Central Banking Theory and Practice cover theoretical and practical aspects of central banking, monetary policy, including the supervision issues, as well as banking and management in central banks.The purpose of the journal is to educate the general public about the key issues that the central bankers globally face, as well as about contemporary research and achievements in the field of central banking theory and practice.  Archiving  Sciendo archives the contents of this journal in Portico - digital long-term preservation service of scholarly books, journals and collections.  Plagiarism Policy  The editorial board is participating in a growing community of Similarity Check System's users in order to ensure that the content published is original and trustworthy. Similarity Check is a medium that allows for comprehensive manuscripts screening, aimed to eliminate plagiarism and provide a high standard and quality peer-review process. 