The Global Financial Market On Central Bank 's Autonomy From The Government 's Administration

973 Words Oct 27th, 2016 4 Pages
The global financial market has actively changed since the 1990s after experiencing two financial crises in 1997 and 2008, and consequently, the central bank’s features such as structure and functions have altered too, especially its position with the government. To date, central bank’s independence, accountability, and transparency have been seen as three essential pillars of this change. Padayachee (2004) and Crowe & Meade (2008) comment that this is a real revolution in the central bank’s management approach in both industrial and developing countries. In these three pillars, a factor that economists, policymakers, lawyers, and practitioners have been involving the most is independence. The independence mentioned here is the central bank’s autonomy from the government’s administration in conducting the monetary policy. This independence is essential because the price stability has become one of the most important concerns of almost all governments around the world nowadays. The answer to what level of this independence is acceptable is still a discussion amongst relevant academia and practitioners. However, studies on central bank independence are still ongoing and never late to carry out. Under this light, the project on comparison the central bank’s objectives, structure, monetary policy, and independence between the State Bank of Vietnam (SBV) and the Reserve Bank of New Zealand (RBNZ) is conducted with the purpose of contributing a general look of the central bank…

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