Central Bank Governance: Common Elements or Different Models?

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, many elements necessary for excellent governance. But they also display significant differences in principle and in operating procedures, and hence in their monetary policy and corporate governance frameworks. 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 to commit fully to optimal transparency and accountability. There is "no one size fits all" best practice governance framework for central banks, but key desirable principles should be adhered to and two specific suggestions on governance reporting and funding agreements should be considered