government of newly independent ceylon decided to replace the currency board system which it had inherited from the british with a more flexible central bank. accordingly, the government decided to seek foreign assistance to prepare a blueprint for a central bank based on the country ’ s specific position and future prospects. however, for reasons not very clear, this assistance was sought from usa and not from the uk, the traditional advisor of the country. thus, the federal reserve bank of new york was approached by the then minister of finance, j. r. jayawardene, to obtain the services of a suitable consultant. the bank, in turn, informed the government that it could not release its best consultant, namely, david l gosse, for this purpose, because he had been occupied in some other assignment at that time. gosse was considered the ideal expert for the job, because he already possessed the required experience for the job at hand by pioneering the work relating to the establishment of the central bank of the philippines. however, gosse was kind enough to recommend his assistant, john exter, for the job. hence, exter was not the first choice, but an engagement done by default. yet, the wisdom, erudition and professionalism shown by exter in both making the recommendations and subsequent running of the bank, is a testimony that he was the correct choice for the job at hand. john exter had an illustrious academic as well as professional career. after graduating from the college of wooster, he completed post graduate work at both the fletcher school of law and diplomacy and harvard university. after a brief stint at mit during world war ii, he joined the federal reserve system as an economist. then, in 1948, he was on release to serve the government of the philippines as advisor to its secretary of finance. it is from there that he came to ceylon as the consultant on the establishment of a central bank, still on release from the federal reserve system. after serving his term as governor of the central bank, exter did not return to the federal reserve system. instead, in 1953, he joined the world bank and was offered the position of the division chief for the middle east. after a year with the world bank, he came back to the federal reserve system as its vice president on international operations at the federal reserve bank of new york. his career at the federal reserve system ended in 1959 when he decided to join the first national city bank which later became the citibank. from 1960

w a wijewardena : john exter – central banker for all times article by mr w a wijewardena, deputy governor, central bank of sri lanka, on the first anniversary of the death of mr john exter ( founder governor of the central bank of ceylon / sri lanka ), issued to sri lankan newspapers, 28 february 2007. * * * the first death anniversary of john exter, founder governor of the central bank, falls on 28th of february. he died in 2006 after living a very productive life for 95 long years. john exter can be regarded as one of the history makers in modern sri lanka. he lent his wisdom, intellect and experience, without any reservation, for the establishment of the central bank of ceylon, the name of the bank at that time. the bank was established in 1950 on the basis of the recommendations made by him as a one man committee, the report of which is now known as the exter report. he made history once again by becoming the governor of that maiden bank at the young age of 39, an age normally considered as too low for that prestigious and demanding position. his task was to establish the bank, staff it and lead it in the first few formative years, so that it could eventually be taken over by a sri lankan management. his history making did not end there. as undertaken by him at the time of appointment, exactly after three years, he relinquished his responsibilities as governor to pave way for a sri lankan to occupy that high post. the central bank is, forever, deeply indebted to john exter. the rationale and philosophy of the central bank which he evinced in his report in the late 1940s are equally valid for today as well. his report is unique in that sense, because it carries a justification of each and every section of the monetary law, so that the later generations of central bankers would not have any ambiguity of what was meant by them. as a result, even today, the exter report is used by both central bankers and academics as their bible. hence, by any standard, exter is a central banker for all times. the appointment of john exter to a one man committee on the establishment of a central bank is also marked by an interesting legend. edmund eramudugolla, a former senior deputy governor of the central bank, has narrated this legend in his reminiscences of the central bank of sri lanka. according to him, the