What are the Criteria for an Autonomy of the Typical Central Bank?
1. Functionality of institution – the institution must be so organized and administer of such instruments to be able to perform their own tasks, and therefore have the aspects of:
– The internal organization of the institution,
– The status of links with external institutions (mainly the government), the instruments of monetary policy.
2. Financial independence – to what extent government expenses are implemented by the central bank. The direct influence of the government on the central bank imposes automaticity of financing government expenses.
3. Independence of the authorities – in what way, by whom, and for how long central bank authorities are selected. In addition, can members of the bank be removed?
The authorities of the Central Bank are:
– The Federal Bank Council,
– Directorate (executive, who is responsible for the enforcement of the Council’s provisions).
The work of the two authorities of bank are managed by president and vice-president. President, Vice President and people of the Directorate are appointed to their positions. Appointments are made at the request of the Government by President. In this way, the president, vice president and members of the Directorate embrace their positions for eight years with no right of appeal from the position. Other authorities from the management of the central bank are also appointed by the President, but at the request of the Second Chamber of the parliament. These individuals also can’t be revoked.
Touching the problem of personal autonomy there the following issues should be indicated:
– appointment which means what authority appoints to the position in bank’s management,
– term (how long it takes),
– the possibility of appeal, ie. whether the appointment is with the right to appeal and, if so, in what mode,
– the high qualifications of the person appointed.
The real autonomy of the central bank is the simultaneous consideration of all the criteria of autonomy. Real autonomy is real money and real finances.