BIS Chief Highlights Central Bank Independence and Accountability
Importance of Central Bank Independence
By Marc Jones
Foundations for Central Bank Credibility
LONDON (Reuters) -The new head of the Bank for International Settlements has used his first prominent speech to stress the need for central banks to focus on inflation and for their independence from politicians to be protected.
Impact of Political Criticism on Central Banks
Uncertainty around the world's most important monetary authority, the Federal Reserve, has risen this year as U.S. President Donald Trump has repeatedly criticised its Chair Jerome Powell and on Monday announced he was firing one of its governors, Lisa Cook.
"A clear price stability mandate, independence and accountability are the anchor, hull and mast of the monetary policy vessel," Pablo Hernandez de Cos, who in July took over as General Manager of BIS, often dubbed the central bankers' central bank, said in a speech.
He did not address Trump's moves directly but laid out what he described as the "foundations" for central bank credibility.
Independence was vital so central bankers are able to set interest rates and use tools like quantitative easing, "based on economic considerations in the long-term public interest, free from short-term political interference," the former Bank of Spain Governor said.
(Reporting by Marc JonesEditing by Tomasz Janowski)
