Independence and Accountability of Central Banks. The Case of Ten European Emerging Market Economies

• Autorzy: Eduard Hochreiter , Tadeusz Kowalski
• Języki publikacji: EN

Abstrakty

EN

With economic and political transition now well advanced in a number of European merging Market Economies (EEME) these countries are now setting their eyes to become embers of the European Union and eventually to join the EMU. One important aspect of the ther is the requirement of independence of central banks as laid down in the Maastricht Treaty, itimately related to the issue of independence is the accountability of such central banks. This paper is concerned with institution building in the central banking sphere in :n EEMEs, namely in Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. In doing so, it attempts to strike a balance between analysis and ictual information by concentrating on issues and facts which, it is hoped, will be of longer-term iterest. In particular, it discusses the question of political and functional independence of central anks in these countries (Section 2). Moreover, the issue of central bank accountability is nalysed (Section 3). In the final section some conclusions are drawn. The analysis is based on jgislation effective in these countries in 1997/1998. Since that time no major changes have been itroduced in the central banking legislation in the EEMEs. The current central bank-acts of Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovenia and Slovakia closely resemble those of Western central banks. The current laws endow the central banks with a high degree of formal political and functional independence. Price stability has been singled out as the prime task of the central bank. Fiscal financing is legally restricted or not allowed (the case o: Estonia and Poland). All analysed central bank legislation provide for democratic accountability comparable to that of European developed economies. The analysis shows that the most important difference to a typical Western central ban! act concerns the decisive, formal say most central banks of EEMEs have in the selection of th monetary and exchange rate regime. The main weakness relates to the actual limitation of fisce financing. The group of ten EEMEs is very heterogeneous. It has to be stressed that progress i developing financial markets has been uneven but by and large - most of the countries unde consideration by now have got fairly well developed financial markets. This development ha helped the central banks to improve the monetary policy operations. Despite progress in financial intermediation, the still relatively shallow domestic capifc markets and a low level of domestic savings in the EEMEs mean that even reasonable low publ; sector borrowing requirements (budget deficits) lead to high real interest rates. This relationshi between budget deficits and interest rates calls for co-ordination of fiscal policy with the centr banks' monetary policy aimed at maintaining price stability. This is to be even more important the face of increased foreign direct investment, the EU transfers, and the EU membersh aspirations of the EEMEs. While a high degree of central banks' independence is an important prerequisite fi stability-oriented monetary policy, rigidities of the real sector transformation will continue hinder the central banks' mission. (fragment of text)

Słowa kluczowe

EN

Banking; Central banks; Economy; Financial intermediation

PL

Bankowość; Banki centralne; Gospodarka; Pośrednictwo finansowe

• Czasopismo: Raporty. Opracowania. Referaty / Akademia Ekonomiczna w Poznaniu
• Rocznik: 1999
• Numer: nr 10 Proceedings of the Ace/Phare Conference on Building Financial Institutions in Thansition Economies, Poznań, Poland 14-15 May, 1999
• Strony: 236--239

Twórcy

autor

Eduard Hochreiter

• Austrian National Bank

autor

Tadeusz Kowalski

• Poznań University of Economics, Poland