From the Introduction:
Monetary policy decisions are now typically taken, and implemented, by independent central banks. Substantial operational independence, of the sort given to most central banks in recent decades, needs to be accompanied by good structures to provide effective governance and accountability. There is no agreement on a single best governance and accountability model, and the details of such systems differ quite widely across countries. There are common features across countries, but each country decides what is best for its own needs.
New Zealand’s central banking legislation was rewritten when the Reserve Bank was given operational independence. The Reserve Bank of New Zealand Act 1989 was explicitly designed to balance considerable operational autonomy for the Reserve Bank with a high degree of formal accountability. In some other countries, changes were undertaken with little or no material change to existing legislation.
This article compares the key features of the monetary policy accountability and governance arrangements of New Zealand and a range of countries with similar approaches to monetary policy. The focus of this article is on description, and it does not evaluate the relative merits of the different models.
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