A significant measure of independence

A significant measure of independence of the Central Bank is due? Its tasks, which in any country are usually defined as the maintenance of monetary and exchange rate stability in order to provide anti-inflationary economic growth. The Government is concerned, above all, short-and medium-term objectives, the approach of the next elections (sometimes contrary to long-term interests of the state). Relatively independent of the Central Bank in such a situation should act as a kind of counterweight. On the other hand, the independence of the Central Bank has the objective limits, because its fundamental differences with the government can affect the efficiency of economic policies that it pursues. Therefore, there is a tendency to increased government influence in the face. For example, in the UK the Bank of England independence has been gradually decreasing since its nationalization in 1946, and with the arrival in 1979 the Conservatives to power this process accelerated. In many countries, the highest authority of the Government and the Ministry of Finance in respect of securities in their national legislation. At the same time the Central Bank have the official right to express their opinion, have several advantages, and the right to direct orders from the Ministry of Finance is rarely used. Whatever functions are not assigned to the Central Bank, it is always a regulatory body, combines features of bank and government agency. Of fundamental importance is a clear delineation of public finances and the banking system, ie limiting government's ability to use funds of the Central Bank. In many states, direct lending to the government practically implemented (U.S., Canada, Japan, UK, Sweden, Switzerland) or restricted by law (Germany, France, the Netherlands). The relatively high share of government securities on the balance sheet of the Central Bank does not mean the initial part of the Central Bank in the public debt, as bonds are bought and sold primarily in the conduct of monetary policy. For example, in the UK since 1981, focuses on the use in the operations of the Bank of England commercial bills, and they became the foundation of banknote issue. The value of securities as the emission of monopoly and accounting center has declined due to a modification of the currency and the introduction of electronic payment systems. Banking supervision is often the responsibility of the special organs, but not in CB. The key challenge now lies in the Central Bank on monetary policy. Legislative emission monopoly over the Central Bank as representative of the state is enshrined in Western Europe and the United States only with respect to banknotes and coins in some cases. Here, cash handling is very modest place, even in the calculation of the population - usually less than 5-10%. Planning cash circulation is absent because of its absurdity: the money is automatically "sold" through the offices of banks, the Central Bank as the presenting demand and can not be used to cover budget deficits. Therefore, the monopoly on banknote issue does not mean its strict controls or linkage with macroeconomic indicators. The issue of banknotes in principle different from the issuance of debt obligations of the state only in that bill - promissory notes on demand - can be used as legal tender and it is not necessary to pay interest. Since modern money has leveraged nature, bank accounts, in fact, almost indistinguishable from the bill and is a major component of money supply in circulation. Category: Klasifikatsiya real estate market