Skingsley: Developing the central bank mandate
Please note! The Riksbank has brought forward the publication of this material as a result of it having already been made public by a third party. Publication was planned to take place at 14.30.
"We need to create balance between, on the one hand, the desire of the legislator to give the central bank a clear mission and mandate, and, on the other, the scope of the central bank to perform its tasks independently and flexibly", Deputy Governor Cecilia Skingsley says in a speech at the conference being held in conjunction with the 200th anniversary of Oesterreichische Nationalbank.
Since the onset of the global financial crisis in 2007, central banks have focused on stabilising the financial systems and reaching inflation targets. Their actions have trigger broad and lively discussion on the role of central banks in the national economy, their mandate and the scope they have to perform their tasks. "This is not surprising and I welcome the discussion; many central banks have been forced to take fresh measures and reintroduce old ones sometimes in new areas on a large scale. It is good that these issues are discussed; it makes society more aware of the central bank's role, objectives and tools and I hope it leads to well-considered reforms", says Ms Skingsley.
The discussion is intensive, not just in Sweden, where a new parliamentary inquiry into the Riksbank is about to begin, but also in a number of other countries, where the efforts of central banks are being discussed in relation to their statutory tasks, notes Ms Skingsley.
As regards financial stability, Ms Skingsley points out that there is still no international consensus concerning how best to allocate responsibilities among legislators and various authorities. As stability measures can be unpopular, there is a risk that measures that maintain stability in the long run will not materialise because they are not popular in the short-term. "An interesting model is for macroprudential policy decisions to be taken by a decision-making committee with clear objectives, the members of which have personal and long-term mandates and whose work is highly transparent. This would guarantee both democratic control and operational decision-making capacity, Ms Skingsley concludes.
