The Bank’s contribution must necessarily be a longrun contribution. The Bank does not itself produce goods and services, but it should, by creating the right monetary conditions enable the country…” to do so. What Exter repeatedly maintained was the Central Bank was only a necessary condition for future prosperity. That necessary condition was to be created by maintaining price stability so that the economic agents could make economic decisions based on long-run economic prospects. Since the Central bank does not produce goods and services, it cannot directly get involved in economic activities. It is, therefore, the task of the government and the private sector to take appropriate measures to create wealth in the society. The only weapon of the Central Bank is to print money and such money, by changing the price levels, acts only as an illusion. Hence, Exter thought it necessary to warn those who had been advocating the Keynesian type of ideology to raise government expenditure through printed money. In the Exter Report, he argued that higher income created through money creation would simply stimulate consumption of imported goods and precipitate serious balance of payments difficulties. A similar view has been expressed by Dr Goh Keng Swee, economic architect of Singapore, when he clarified why Singapore chose a currency board system in preference to a central bank. He says that none of his Cabinet colleagues “believed that Keynesian economic policies could serve as Singapore’s guide to economic well-being”.
However, to the credit of Exter, many safeguards, checks and balances were added to the law establishing the central  2  BIS Review 92/2007  bank to prevent such undisciplined monetary management by the new central bank. The absence of even a single episode of hyper-inflation or crises of monetary nature during the past 57 years of existence of the central bank is testimony to the efficacy of these measures added to the law. The role of the new central bank The mandate given to Exter was, inter alia, to “report on the organization and functions of a Reserve Bank with a view to ensuring, within the limits of monetary action, full employment of the economic resources of the country, and, if need be, on the promotion of supplemental credit institutions in furtherance of this policy…”. The mandate itself had recognized that the central bank should facilitate economic development “within the limits of monetary action”. This meant that, though short-term economic stimuli could be provided by raising money and credit, the bank should not do that, since it leads to the abandonment of price stability. Any stimulus to be provided by the central bank should, therefore, be practised cautiously and with due regard to its impact on price stability. While emphasizing on the importance of money and credit on an economy, Exter referred to this as “stable money which is essential to performance under contracts and to the equitable liquidation of debt”.