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Central Bank Governance: Common Elements or Different Models?

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Author Info
Viv Hall (Victoria University of Wellington)
Abstract

This paper evaluates the governance performance of four small, open economy central banks. Two of these, the Reserve Bank of Australia and the Reserve Bank of New Zealand, are inflation targeting; the other two, the Hong Kong Monetary Authority and the Monetary Authority of Singapore, place major emphasis on exchange rate stability. The four have in common a considerable number of the elements seen as necessary for excellent governance. These include relevant statutory underpinnings, clarity of primary monetary policy goals, commitment to improved transparency and accountability for monetary policy decision making, and ongoing financial statement accountability. They also display significant differences in principle and in operating procedures, and hence in their monetary policy and corporate governance frameworks. In a broad sense, the differences can be associated with different primary goals, different constitutional environments, single-person or ¡§committee¡¨ decision-making models, and the central banks having proceeded at different speeds to recognise the need for, and to commit fully to, optimal transparency and accountability. There is ¡§no one size fits all¡¨ best practice governance framework. The individual central banks should therefore continue aiming for excellence in monetary policy and corporate governance in their own rights, rather than for some common operational governance model. In this respect, a number of key desirable principles should be adhered to.

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Paper provided by Hong Kong Institute for Monetary Research in its series Working Papers with number 202003.

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Length: 44 pages
Date of creation: Oct 2003
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Handle: RePEc:hkm:wpaper:202003

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Related research
Keywords: Central Bank governance corporate governance monetary policy independence credibility transparancy accountability Australia New Zealand Hong Kong Singapore inflation targeting exchange rate targeting currency board

Find related papers by JEL classification:
F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
F31 - International Economics - - International Finance - - - Foreign Exchange
G30 - Financial Economics - - Corporate Finance and Governance - - - General

References listed on IDEAS
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  1. Joanne Archibald, 2001. "Independent review of the operation of monetary policy: final outcomes," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 64, September. [Downloadable!]
  2. Lorenzo Bini-Smaghi & Daniel Gros, 2001. "Is the ECB Sufficiently Accountable and Transparent?," Economics Working Papers 007, European Network of Economic Policy Research Institutes. [Downloadable!]
  3. Eijffinger, Sylvester C W & Geraats, Petra M, 2002. "How Transparent are Central Banks?," CEPR Discussion Papers 3188, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  4. Alan S. Blinder, 2000. "Central-Bank Credibility: Why Do We Care? How Do We Build It?," American Economic Review, American Economic Association, vol. 90(5), pages 1421-1431, December. [Downloadable!] (restricted)
    Other versions:
  5. Stephen G. Cecchetti & Stefan Krause, 2002. "Central bank structure, policy efficiency, and macroeconomic performance: exploring empirical relationships," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 47-60. [Downloadable!]
  6. Georgios Chortareas & David Stasavage & Gabriel Sterne, . "Does it pay to be transparent? International evidence from central bank forecasts," Bank of England working papers 143, Bank of England. [Downloadable!]
    Other versions:
  7. Petra M. Geraats, 2002. "Central Bank Transparency," Economic Journal, Royal Economic Society, vol. 112(483), pages 532-565, November. [Downloadable!] (restricted)
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