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Central Bank Governance

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  • JoAnne Morris
  • Tonny Lybek
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    Abstract

    This paper identifies issues to consider when designing the structure, size, and composition of the governing boards and management of a central bank. While central bank autonomy and accountability are generally accepted as good practice, there is less consensus regarding the structure, size, and composition of the governing bodies. This paper surveys 101 central bank laws covering 113 countries and classifies the governance structure according to degree of autonomy, functions performed, size, composition, appointment procedures, and terms of the members. The paper concludes that an appropriate balance must be struck between the functions of the governing entities, simplicity, and country specific factors. The functions of the various bodies follow logically if a greater appreciation exists for the type of autonomy delegated to the central bank.

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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 04/226.

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    Length: 53
    Date of creation: 01 Dec 2004
    Date of revision:
    Handle: RePEc:imf:imfwpa:04/226

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    Related research

    Keywords: Central bank role; central bank; central banks; monetary policy; inflation; reserve bank; national bank; monetary fund; monetary union; monetary system; monetary authority; european monetary system; government securities; european monetary institute; monetary stability; monetary authorities; capital account liberalization; monetary policy objectives; market for government securities; currency board; monetary systems; monetary authority of singapore; monetary policy frameworks; monetary instruments; long-term interest rates; monetary control; stable prices; monetary policy decisions; reserve banks; money supply; private bank; bahrain monetary agency; monetary target; monetary aggregate; monetary anchor; monetary institutions; monetary policy transparency; monetary aggregate targets; intermediate monetary target; monetary unions; monetary frameworks; monetary phenomenon;

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    References

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    1. Daunfeldt, Sven-Olov & de Luna, Xavier, 2002. "Central Bank Independence and Price Stability: Evidence from 23 OECD-countries," UmeÃ¥ Economic Studies 589, Umeå University, Department of Economics, revised 12 Jun 2003.
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    Citations

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    Cited by:
    1. Hasan , Iftekhar & Mester, Loretta, 2008. "Central bank institutional structure and effective central banking: cross-country empirical evidence," Research Discussion Papers 29/2008, Bank of Finland.
    2. Xavier Freixas, 2009. "Monetary policy in a systemic crisis," Oxford Review of Economic Policy, Oxford University Press, vol. 25(4), pages 630-653, Winter.
    3. Donato Masciandaro & María J. Nieto & Henriëtte Prast, 2007. "Financial governance of banking supervision," Banco de Espa�a Working Papers 0725, Banco de Espa�a.
    4. Xavier Freixas & Bruno Maria Parigi, 2008. "Lender of Last Resort and Bank Closure Policy," CESifo Working Paper Series 2286, CESifo Group Munich.
    5. Yanliang Miao, 2009. "In Search of Successful Inflation Targeting," IMF Working Papers 09/148, International Monetary Fund.
    6. Mark R. Stone & Etienne B. Yehoue & Kotaro Ishi, 2009. "Unconventional Central Bank Measures for Emerging Economies," IMF Working Papers 09/226, International Monetary Fund.
    7. Marcel Peter & Scott Roger & Geoffrey Heenan, 2006. "Implementing Inflation Targeting," IMF Working Papers 06/278, International Monetary Fund.
    8. Isabella Lindner & Gabriela Mihailovici, 2013. "Understanding Central Banks’ Role in Enlargement – Governance Issues," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 1.
    9. Marc Quintyn, 2009. "Independent agencies: more than a cheap copy of independent central banks?," Constitutional Political Economy, Springer, vol. 20(3), pages 267-295, September.
    10. Scott Roger, 2009. "Inflation Targeting At 20," IMF Working Papers 09/236, International Monetary Fund.
    11. Frisell, Lars & Roszbach, Kasper & spagnolo, giancarlo, 2008. "Governing the Governors: A Clinical Study of Central Banks," Working Paper Series 221, Sveriges Riksbank (Central Bank of Sweden).
    12. Szilárd Erhart & Jose-Luis Vasquez-Paz, 2007. "Optimal monetary policy committee size: Theory and cross country evidence," MNB Working Papers 2007/6, Magyar Nemzeti Bank (the central bank of Hungary).
    13. Szilárd Erhart & Jose Luis Vasquez-Paz, 2008. "Determinants of the size of a monetary policy committee: Theory and cross country evidence," Working Papers 2008-001, Banco Central de Reserva del Perú.
    14. Siklos, Pierre L., 2008. "No single definition of central bank independence is right for all countries," European Journal of Political Economy, Elsevier, vol. 24(4), pages 802-816, December.

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