The relationship between the central bank
and the government
Paul Moser-Boehm

Information sharing and cooperation between the central bank and the government
In many countries the world over, the central bank has been given the
mandate to preserve price stability as its single or primary objective,
and been granted autonomy from government to make sure that shortterm political considerations do not interfere with achieving this
objective. Accountability to the legislature and the public at large
balance the central bank’s autonomy. Transparency – the third element
of the modern paradigm of central banking – is important for holding
the central bank to account, and for making monetary policy efficient by
shaping inflation expectations. In principle, there is a clear division of
responsibilities and accountabilities between the central bank on the
one hand, and the government and the Minister of Finance on the other
hand. Even so, information sharing, cooperation and coordination
between the central bank and the government are important in a
number of respects. The first and major part of this note focuses on
practical aspects of the cooperation between the central bank and the
government, and is based on a survey of central banks conducted in
early 2006.1 This is followed by a brief review of aspects of the
financial relationship between the central bank and government. Before
turning to the survey information, a brief discussion of the underlying
issues may be useful.
Clarity of framework and objectives. In general, a strong appreciation
of the different objectives and operating frameworks of the central
bank, the fiscal authorities and development institutions (where
applicable) will be conducive to a fruitful dialogue among them,
because information and views are shared more easily when all
parties understand and respect the others’ rights and responsibilities.
1

44

Central banks represented on the Central Bank Governance Network
(which is part of the Central Bank Governance Forum at the BIS) were
invited to participate in this survey. The statistics in this note are based
on the 24 responses received to date (11 from industrialised countries,
13 from emerging market economies). The industrialised countries in
the survey have a median per capita GDP of USD 31,000 (PPP-adjusted
estimates for 2005) and the emerging market economies one of USD
10,400. The information suggests a number of differences between
approaches taken in industrialised countries and this group of emerging
market economies, but it is difficult to judge the extent to which these
differences can be extrapolated to emerging market economies with per
capita incomes substantially below USD 5,000 or so.

45

Clear and focused objectives for each authority and a high degree of
transparency in pursuing them help the communications process within
the public sector, in addition to shaping private sector expectations and
providing a basis for accountability.

as a major part of its role. But it is also worth noting the dangers in an
institution shouldering too many tasks at once, and losing clarity of
incentives in the process, for itself as well as for other economic
agents. Therefore, central banks in developing countries often prefer to
limit their development functions to the financial sector, where they are
best placed to contribute to infrastructure building and human capital
formation.

Coordination of monetary and fiscal policy. If the fiscal authorities know
the central bank’s policy reaction function and its formal or informal
analytical model, they can anticipate the monetary policy response to a
given fiscal action and adjust the action accordingly. In principle,
coordination between monetary and fiscal policy can thus be achieved
without negotiations between the monetary and the fiscal authorities,
and the central bank can take advantage of being the first mover (by
establishing a credible reaction function), which is important to avoid
undermining its price stability objective. To implement this approach, it
will still be useful if the central bank and the government can establish
a culture of no surprises, to assist each other in staying the course in
spite of a myriad of daily challenges.

Macroeconomic management challenges. In low-income countries the
dependence on selected commodity exports can make them highly
susceptible to terms-of-trade shocks, the predominant role of the
primary sector can lead to large fluctuations in output, demand and
government revenues (in part simply as a result of fluctuations in the
weather), and the volatility of aid flows can be a further huge challenge
in trying to stabilise output (Bevan 2005). In addition, if market
imperfections are such that monetary policy can have permanent
effects on real variables, the central bank may be subject to yet more
political pressures than in more advanced emerging market economies
or industrialised countries.2 These factors, and a scarcity of reliable
statistics and analytical models, may require very close interaction
between monetary and fiscal authorities, and in some cases
development institutions. This in turn puts a premium on well
considered governance arrangements.

Coordination in other areas. In some areas other than monetary policy,
coordination between the central bank and the government may need
to be quite close. For example, this is the case for fiscal agent functions
of the central bank. In addition, the central bank’s financial sector
regulatory functions or advisory responsibilities (as well as its own
participation in the financial system) allow it to foster the development
of the sector, which will require close coordination with the government,
for instance on legal reform.

Oil and other resource revenues. An important aspect of policy
coordination in a number of developing countries concerns the
management of oil and other resource revenues. For oil-exporting
countries, two approaches may be used. One is to budget at a
conservative, “normal” oil price. This reduces the danger of large budget
deficits if prices decline suddenly, and is now done by, for example,
Nigeria. The second is to establish a resource fund to set aside some
or all of the resource revenues net of costs. In the industrialised
countries this has been done by Norway and (at the provincial level) in
Canada; in Africa it has been implemented by Gabon and now Chad for
oil revenues, and in Botswana for revenues from diamond mining.
Proper governance arrangements for such resource funds are essential
but can be difficult to devise and implement.

Development role of the central bank. The single most important
contribution central banks can make – in industrialised and developing
economies alike – is to provide an environment of monetary stability,
which in turn is conducive to economic growth and development. At the
margins of this principle, central banks in some industrialised countries
are making an effort to focus their activities ever more on this core
responsibility. By contrast, in emerging market economies central banks
are often a centre of resources and expertise that is asked to take on a
number of development functions. It is worth noting that historically,
many central banks have played an important role in developing the
financial sector’s capability – for example, the Bank of England has for
most of its life seen itself as a champion of London as a financial
centre, and the Monetary Authority of Singapore continues to see this

2

46

For example, if foreign exchange reserves are adequate, the central
bank may be in a position to achieve an optimal allocation of
spending over time in spite of aid flows not being disbursed with
optimal timing (Prati et al 2005).

47

Table 1
Frequency of meetings between the central bank and the government
Percentage of respondents (among 24 central banks)
Type of meeting
Percentage of
central banks
having this
type of meeting
IC
EME
A Governor and Minister of Finance
73 31
B Governor and other high-level government officials
91 62
C Deputy Governor and high-level government officials
27 15
D Senior officials and department heads
36 15
E Government representative on central bank’s board
18 62
F Governor at (economic) cabinet meeting
09 54
G Financial stability or supervisory committee
18 38
H Other
36 23
Number of meeting types and
Percentage of
total number of meetings
respondents
using …
Single type of meeting used
00Two meeting types used
09 31
Three meeting types used
36 31
Four meeting types used
55 38

Meetings of senior central bank and government officials
Turning to the practical aspects of cooperation between the central
bank and the government, virtually all central banks participating in the
survey conducted for this note have processes in place to exchange
information and cooperate with the government. However, there are
considerable differences in how this is done. Table 1 provides
information on eight different types of meetings between senior
officials from the central bank and the government that are used in a
significant number of countries. The following points may be noted:

Average number
of meetings
per year
IC
EME
08 09
05 21
09 32
07 12
17 17
10 29
09 14
04 03
Total average
number of meetings
per year

23

47

Figure 1
Purpose of high-level meetings between the central bank and the government

Percentage of responses
0
20
40

60

80

–

Meetings between the Governor and the Minister of Finance or
other high-level government officials are a practice in a larger
share of industrialised countries than emerging market
economies. By contrast, in the latter having a government
representative participate in meetings of the central bank’s board
or the Governor participating at meetings of the cabinet, or of an
“economic cabinet” consisting of key ministers, is far more
frequent than in industrialised countries.

–

For almost all types of meetings, the average number of
meetings held per year is substantially higher in emerging
market economies than in industrialised countries. For all
senior-level meetings together, the average total is 47 meetings
per year (or about one meeting per week) in emerging market
economies, and half of that (two meetings per month) in
industrialised countries.

–

By contrast, the number of different types of meetings tends to
be higher in industrialised countries than in emerging market
economies.3

The differences in the number of meeting types and in the frequency
of meetings suggest that in industrialised countries, the relationship
between the central bank and the government tends to be one of
keeping one another informed in a variety of settings, while in emerging
market economies it may more often be geared towards actual
cooperation, the sharing of quite detailed information and analysis,
and interacting on the larger number of subjects the central bank

Keep informed of major developments
Keep informed of planned actions and initiatives
Crisis management
Monetary policy
Fiscal policy
Coordination of monetary and fiscal policy
Coordination of approaches to international issues

Industrialised countries
Emerging market economies

48

3

The survey questionnaire asked for information on up to four of the
most important senior-level meeting types.

49

tends to be involved with there. Other survey evidence supports this
impression, as will be shown later.4

right to participate in a weekly meeting of the government.7 In the
United States, a Federal Reserve/Treasury luncheon is hosted at the
Federal Reserve Board by one of the Governors on a rotating basis
once every three weeks or so. In addition, some general points may be
taken from Table A1:

Figure 1 summarises the purpose of the various high-level meetings
between the central bank and the government. Most notably, for about
half of the participating central banks from emerging market
economies the coordination of monetary and fiscal policy is a key
purpose of their high-level meeting(s) with the government, while none
of the central banks of industrialised countries indicate that this is the
purpose of any of their meetings with government. Similarly, discussing
monetary policy is a purpose of the meetings considerably more often
in emerging market economies than in industrialised countries. While it
would be wrong to take this as a sign of a lack of monetary policy
autonomy in some of the central banks of emerging market economies
in the survey, it raises interesting questions about potential differences
in the way central banks understand or perceive their role within
government, or about whether they do in fact play a different role.5
The survey information presented above covered all senior-level
meetings between the central bank and the government, irrespective of
the personal involvement of the Governor. To illustrate that the degree
of involvement by the Governor also varies considerably across
countries, Annex Table A1 provides detailed information on all seniorlevel meetings where the Governor takes part in person.6 For example,
the Governor of the Reserve Bank of Australia generally meets with the
Minister of Finance after the meeting of the Reserve Bank Board, while
the Governor of the Central Bank of Norway and the Norwegian
Minister of Finance meet on the day before interest rate meetings of
the Bank’s Executive Board. In the Czech Republic, the Minister of
Finance has the right to participate in the weekly meeting of the board
of the central bank, and the Governor (or Deputy Governor) has the

4

5

6

50

The aggregate information in Table 1 hides a wealth of potentially
useful information on the concrete mix of meeting types used by
individual central banks, as well as on specific aspects such as
timing, detailed attendance, the preparation of the agenda and
meeting documents, and public communications about the
meetings. This information is available to central banks, subject to
preferences on information sharing expressed by participating
institutions. Please contact cbgovernance@bis.org for details.
Concerning the latter, it is widely acknowledged that central banks
in emerging market economies often have development functions
that do not arise elsewhere, but this does not directly explain why
the coordination of monetary and fiscal policy would often be
considered an important reason for the interaction between the
central bank and government.
Annex Table A1 thus covers a subset of the data included in Table
1. Moreover, Table A1 does not show information for central banks
preferring to remain anonymous in this survey, and it does not cover
meetings of the principal board of the central bank where a
government representative is present, on the logic that these are
typically not held primarily to exchange information with the
government.

–

There is a very wide range of practices – some Governors have
less than a handful of meetings with senior members of
government each year, while others meet with the head of
government or the Minister of Finance on a weekly basis.

–

The purposes of meetings involving the Governor tend to be
more wide-ranging in emerging market economies than in
industrialised countries. In part, this probably reflects the often
broader range of mandates of central banks in emerging than in
industrialised economies.

–

In industrialised countries, if a meeting with senior government
officials involves the Governor it is very likely that the Governor’s
attendance at the meeting is essential (and that the meeting
would not be held without the Governor). In emerging market
economies, the most frequent case is that the Governor will
usually attend but substitution is possible. In part, this probably
reflects the larger number of meetings in the latter, but it may
also be the case that a larger number of the meetings in
industrialised countries are held for the express purpose of
hearing the Governor in person, as opposed to sharing
information with the central bank.

Informal contacts
In addition to regular or ad hoc meetings between senior central
bankers and government officials, yet more informal ways of consulting
involve contacts over the phone and by e-mail. Table 2 shows the
nature and frequency of such contacts between the Governor and the
head of state, the head of government, the Minister of Finance and the
Deputy Minister of Finance. In the vast majority of both industrialised
and emerging market economies, the Governor and the Minister of
Finance keep in touch over the phone (e-mail is considerably less

7

In practice, the Minister of Finance participates in the meeting of the
central bank board very rarely while the central bank representative
takes part in almost all weekly meetings of the government.

51

Table 2
Informal contacts between the Governor and senior government officials
Percentage of responses (from 23 central banks)
Contacts between governor and …
Head of
Head of
state
government

Generally not done
Frequency (per year):
Up to five times
Six to 10 times
Eleven to 25 times
More than 25 times
Direction:
Usually Governor contacts
government officials
Usually government official
contacts Governor
Both sides initiate contact
with similar frequency
1

Minister of
Finance

frequent), with both sides initiating the contact with similar frequency.
Calls are typically made once or twice per month. The Governor and the
head of government are also in touch over the phone in the majority of
countries, but less frequently than with the Minister of Finance. Informal
contacts between the Governor and the head of state are yet less
frequent, and generally not made in about half of the countries
surveyed. On the whole, informal contacts between the Governor and
senior government officials are made somewhat more often in
emerging market economies than in industrialised countries.8
This corroborates the impression from Table 1 that consultation
between the central bank and the government tends to be a more
continuous, frequent activity in the former than in the latter. A last
piece of evidence pointing in this direction is that about a third of the
emerging market central banks in the survey have established a
general coordination group at the staff level to deal with all relevant
central bank/government issues, and almost half have set up such a
coordination group for monetary and fiscal policy coordination.
By contrast, such groups are rarely used in the industrialised
countries. The only exceptions are coordination groups for financial
sector/financial stability issues and for crisis management, which are
used in a number of industrialised countries and emerging market
economies alike.

Deputy
Minister
of Finance
IC1 EME
30 15

IC
40

EME
54

IC
30

EME
23

IC
10

EME
8

100
-

80
20
-

67
17
-

33
33
22

13
63
25
-

38
31
23

13
38
13
13

33

20

17

44

25

-

-

-

40

50

22

-

15

13

-

20

33

22

75

77

63

Insufficient detailed information was provided for this column.

Regional groupings and institutions
Table 3
Public comments on policies of counterpart
Percentage of responses (among 22 central banks)
Must comment Chooses to comment
Often
At times
or always
IC
EME
IC
EME
IC
EME
Comments by the central bank on …
Government’s budget
10 8
30 33
40 42
General aspects of fiscal policy
50 17
30 50
Financial sector policy
33
33 17
60 25
Structural policy
40 17
40 42
Comments by the government on …
Monetary policy decisions
17
70 42
General aspects of monetary policy
17
17
50 33

Rarely

Never

IC

EME

IC

EME

10
20
10
20

8
8
25

10
-

0
17
8
8

30
20

17
17

20

8
-

By their very nature, supranational central banks have quite different
relations with governments than national central banks. In Africa, there
are two such institutions: the Central Bank of West African States
(BCEAO) and the Bank of the States of Central Africa (BEAC). The
corresponding monetary and economic zones (WAEMU and CEMAC,
respectively) have considerable power to resist pressures from
individual member countries. In particular, WAEMU has prohibited the
direct financing of governments by central banks since 2002. Instead,
governments in the area are now forced to issue short-term securities
to finance their deficits, which helps develop regional financial
markets.9

8

9

52

The level of the government counterpart who is contacted by the
Governor also tends to be a little higher in emerging market
economies than in industrialised countries. This is consistent with
the central bank Governor in the surveyed emerging market
economies having a somewhat higher average rank in official
protocol than is the case in the participating industrialised countries:
in the former, the most frequent case is the Governor having the
same level as the Minister of Finance, while in the latter the most
frequent arrangement is the Governor being at the level of the
highest-ranking civil servant at the Ministry of Finance.
Thus far, a similar move by CEMAC has been postponed several
times. For details on the two zones, see IMF (2005) and van den
Boogaerde and Tsangarides (2005).

53

informal discussions that contribute to better communication and the
fulfilment of the Eurosystem’s tasks.

An important aspect of regional integration in Africa has been putting
in place regional surveillance over fiscal policies. This is the case for the
two CFA franc zones but is also a feature of other regional groupings
(COMESA, ECOWAS and SADC), where peer pressure is developing.
Regional surveillance – including over governance issues – is also at
the centre of the New Partnership for African Development (NEPAD)
process endorsed by the G7/G8.

Another factor behind the evolution of the relationship between the
ECB and the EU Council and Commission is the continued fostering of
financial integration in the EU and the possible challenges for financial
stability deriving from it. In order to ensure sound regulation, rigorous
supervision and adequate crisis management tools, various specialised
groups have been created within the framework of the so-called
Lamfalussy structure. Given the Eurosystem’s task of contributing to
the smooth conduct of prudential supervision and to financial stability,
the ECB is also involved, to varying degrees depending on the financial
market segments concerned, in the workings of these groups.

The institutional arrangements devised for the euro area may be of
interest for other currency areas. The ECB’s relationship with the EU
Council and Commission (both of which perform executive functions in
the European Union) is mainly based on statutory obligations, since the
EU Treaty provides for a number of forms of interaction between the
ECB and other policymakers of the EU, ranging from consultation to
policy dialogue. In addition, the relationship is shaped by the practical
consideration that contacts with other policymakers are useful in
carrying out the ECB’s functions and tasks, within the statutory limits
established for the ECB and the European System of Central Banks –
most notably their independent status and the primary objective of
maintaining price stability.
The statutory legal framework guiding the ECB’s relationship with the
Council and the Commission has been laid down at the level of the EU
and not that of the euro area. Since for the time being the regional
scope of the euro area does not yet coincide with that of the EU, there
has been a need to “replicate” – on a transitional basis – a similar
framework at the level of the euro area. To that end, informal bodies
have been set up to facilitate closer contacts between the ECB and the
member states of the euro area on issues which are of common
concern. In particular, the Eurogroup has been set up to allow for
informal discussions regarding the euro area between the ministers of
euro area member states, a member of the Commission and the
President of the ECB. At the end of 2004, new working methods for
the Eurogroup were introduced, including a more stable Presidency.
In the same vein, the Economic and Financial Committee and the
Economic Policy Committee have also – on a transitional basis –
adjusted their working methods and meet in a separate euro area
configuration to discuss issues which are of particular relevance for the
euro area. The ECB is a member in these fora and participates in

In the survey, the most important high-level contacts between the
ECB and the EU Council and Commission are: (1) the President of
the Eurogroup and a member of the EU Commission have the statutory
right to attend the meetings of the ECB Governing Council; (2) the
President of the ECB is invited to attend meetings of the Eurogroup;
(3) the ECB has a standing invitation to attend meetings of the Ecofin
Council of Ministers and its preparatory committees;10 and (4) there
are a number of regular bilateral meetings between the ECB and the
EU Commission.
Communication aspects
In some countries, the central bank has an obligation to comment
publicly on selected aspects of government policy, and in a few cases
the government has an obligation to comment on general aspects of
monetary policy. However, in the majority of countries both sides have a
choice over how frequently they comment on the policies of their
respective counterpart (Table 3). It is notable that central banks in
industrialised countries have a higher propensity to comment on fiscal
and structural policies of the government than in emerging market
economies, and central banks as a whole tend to comment more
frequently on government policies than governments do on monetary
policy matters. In fact, it is quite rare for central banks to consider it a
taboo to comment on economic policies of the government, and vice
versa for governments to minimise their comments on monetary policy.

10

54

In practice, it participates regularly in meetings of the preparatory
committees but only occasionally in Ecofin meetings, as most
subjects of relevance to the ECB are usually already addressed in
the preparatory committees or the Eurogroup.

55

Table 4
Central bank lending to government (national or federal level)
Percentage of central banks surveyed
Lending to government:
Total
the central bank …
Must lend
10%
May lend
45%
Must not lend
48%

Industrialised
countries
9%
36%
54%

Emerging market
economies
9%
54%
36%

Why do central banks comment on policies of the government quite
frequently? In emerging market economies, formal rules are mentioned
as a major factor most frequently, while in industrialised countries
tradition, and to a lesser extent the personal preferences of the
Governor, play the most important role (Annex Table A2).11
Satisfaction with arrangements

Source: 2004 survey among Central Bank Governance Network
on central bank services to government.

Concerning the sharing of information with the government, three
quarters of the central banks in the survey are very satisfied, and the
remainder (more often from emerging market economies than
industrialised countries) are moderately satisfied. Regarding the
relationship as a whole, almost 80% of the central banks in emerging
market economies are highly satisfied but 40% of the respondents
from industrialised countries are only somewhat satisfied. Reasons for
the more muted satisfaction in industrialised countries vary. For
example, one central bank was concerned about the relationship not
being formalised enough and therefore being overly dependent on
exogenous events and the personal preferences of key officials, and
another about disputes between the central bank and the government
too often being carried out in the public eye.
Aspects of the financial autonomy of central banks
This note began with the modern triangle of central banking (an
autonomous central bank pursuing price stability in a transparent
manner and being held to account for its performance) and then
discussed practical aspects of the interaction between the central bank
and government in this type of arrangement. The remainder of the note
summarises aspects of the financial relationship between the central
bank and government that have a bearing on the policy autonomy of
the central bank.
Three aspects of the financial autonomy of central banks may be
distinguished: (1) the ability to set the terms and conditions on the
items in the central bank’s balance sheet – this is essential for the
conduct of monetary policy; (2) having the means to bear any losses
that arise from central bank operations and having appropriate rules to

11

56

It appears that formal rules may not always require the central bank
to comment publicly on government policies but are understood to
encourage such comments.

57

allocate profits (including rules that govern the accumulation of capital
and reserves); and (3) the ability to cover operating expenses, and in
particular to set salaries (typically the single largest component of
operating costs) in a manner that allows the central bank to attract and
retain the professional talent it requires.

Concerning the third aspect of financial autonomy, the challenge is to
devise an approach for funding the expenditure budget of the central
bank that encourages the careful stewardship of resources but does
not allow the government to control the central bank via the purse
strings.12 In a 2005 survey of related arrangements, in the majority of
central banks a supervisory board is empowered to approve (and in
some cases to veto or amend) the budget as well as staff salaries. By
contrast, the Minister of Finance has a substantial say on the central
bank’s operating budget in only about 20% of the countries surveyed,
and parliaments generally only have the right to be informed of the
central bank’s budget but need not approve it. The only notable
exception is the salary of the Governor, which must be approved by
parliament in about 20% of the cases, and can be vetoed or amended
by a small number of others.

Concerning the first aspect, monetary policy autonomy may be at risk if
the central bank can be obliged to lend to the government or provide it
with implicit or explicit subsidies in other ways, for example by
supporting the price of government debt. Where financial markets are
well developed, this risk is the principal reason why lending to
government is typically prohibited when the central bank law is
modernised, for example to comply with the Maastricht criteria in the
case of actual or prospective euro area participants (Table 4 provides a
snapshot of the frequency of such prohibitions). In emerging market
economies, it is also important to address this risk, but there is a
second reason why it is desirable to limit access to central bank credit
by the government. This is to provide an impetus for the development of
local money and bond markets, which will benefit from the government
being motivated to develop a local market-based source of credit, and
the critical mass the government’s borrowing needs may provide.

In many cases, the costs of providing services to government can be
covered by pricing them, which also addresses the problem of implicit
subsidies and competitive distortions. However, in practice it may be
hard to agree on terms with the government, or the central bank law
may restrict the pricing of some or all services to government. To
illustrate, in a 2004 survey, half of the emerging market economies and
a third of the industrialised economy central banks did not price
services to the national government at all.

At the same time, practical experience shows that it can be very
difficult to convince governments, particularly in low-income countries,
to agree to a reform of the central bank law that includes the wholesale
prohibition of lending to government. To address this problem, great
efforts have been made to draft central bank laws that limit government
access to or facilitate a gradual weaning of the government off central
bank credit, but not much is known about how effective such provisions
are in practice.
The second aspect of financial autonomy concerns an adequate level
of central bank capital in relation to the risks the central bank is
expected to absorb, as well as clear and consistent provisions on
accounting for valuation changes, on the creation of reserves, and on
the transfer of a central bank surplus (or loss) to the government. The
Report by the Study Group on Central Bank Capital (BIS (2005a))
addresses these issues in detail.

12

58

Some aspects of this issue are discussed in a report, Provision of
Information on Central Bank Expenditure Budgets (BIS (2005b)).

59

Meeting type13

Presence of Governor14

Senior government counterpart(s)15

Industrialised countries
Australia
A E
MF(E)
Finland
B E
HG(E), ME(E)
Iceland
B E
HG(E), MF(E)
Israel
A E
MF(E), ME(U)
B E
HG(E)
F U
HG(E), AM (E)
New Zealand
B E
HG(U), MF(E)
B E
MF(E)
B U
MF(E)
A E
MF(E)
Norway
A E
MF(U)
Emerging market economies
Chile
A E
MF(E)
Czech Republic F U
HG(A), AM (A)
H U
Deputy HS (A), AM(A)
B U
MF(U)
Hong Kong SAR E U
ME(E)
G U
ME(E), MF(U)
G U
MF(E)
A U
MF(U)
B U
HG(U), MF(U)
B U21 MF(U)22
F U
HS(E), ME(E), MF(E)
B U
MF(D), HG&ME(D)
F E
MF(U), HG&ME(D)
Hungary
India
Mexico
Philippines
Turkey

14

•
•

•
•

•
•
•
•
•

•
•
•
•

•
•
•
•
•

•
•
•
•

•
•
•

•
•
•
•
•
•
•

Keep informed of plans

•
•
•
•
•
•
•
•
•

Keep informed of developments

•
•
•

•

•

•
•

•
•
•
•
20

•

24

•

•

•
•
•
•
•

•
•
•
•

Coordination of monetary & fiscal policy

•
•

•

•

Fiscal policy

• •
•
• •
•19
•23 •
•23 •

•

Crisis management

•
•
•

•

•
•
•
•
•
•
•
•
•
•
•
•

•

•

•
•
•
•
•
•
•

•

•23

•18

•

•
•

•
•
•
•

20

21

23

24

Number per year / type17

22

6/R
12/R
4/I
12/I
4/A
15/R
4/R
3/I
3/A
12/R,A
9/R

19

M/NA
G/HG
M/M
G or o/NA
G or o/NA
G/G
G/NA
G/NA
M/NA
M/NA
G/G

18

20/R
50/R
4/R
20/I
6/R,A
/R, A
/R, A
5/A
8/A
25/A
52/R
/A
2/R

Other

M/NA
G/G
G/G
M/ad hoc
CB/G
G/G
G/G
M/NA
M/NA
M/24
M/G
M/NA
G/G

Specific other issues

Where / Chair16

17

Coordination of approach to internatl issues

16

Monetary policy

15

25

Please see Table 1 for definitions
E = essential; U = usually; D = on demand
HS = Head of State
HG = Head of government
AM = All ministers
ME = Ministers with economic portfolio
MF = Minister of Finance
CB = Governor or central bank
G = senior government participant or government office
M = mixed; NA = not applicable (very small meeting)
R = regularly scheduled
I = irregular schedule
A = ad hoc
Financial and FX policy
Hong Kong SAR operates a Currency Board system
and the monetary policy objective is set by the government
Hong Kong’s monetary policy is exchange rate stability
under the linked exchange rate system
No substitution
No substitution
Exchange rate policy
Chaired by MF if present; otherwise by Governor (if present)
No meeting in past 12 months
13

Exchange Fund Advisory Committee
Council of Financial Regulators
Financial Stability Committee
Economy Supervisory Meeting

Government Economic Council

Governor is economic advisor of Government
Pre-Monetary Policy Statement meeting
Informal ad hoc meetings
Formal ad hoc meetings
One-on-one meeting with Secretary of Treasury
On day before interest rate meeting of Executive Board

After RBA board meeting
Economic Council

Comments

Exchange Commission

61
60

Annex Table A1
Meetings between the
Governor and senior
government officials

Annex Table A2
Major factors behind practices for public comments
Percentage of responses

References
Major factor

Formal rules (eg central bank law, MoU)
Tradition
Personal preference of Governor
Personal preference of member of government
Other

IC
20
50
10
10

EME
75
17
8
8
17

Contributing
factor
IC
EME
30 30 75
50 25
40 8
-

Not important
or not applicable
IC
EME
40 8
10 20 42
30 42
-

Bank for International Settlements (2005a):
Report by the Study Group on Central Bank Capital.
Available for registered central bank users on https://e.bis.org
Bank for International Settlements (2005b):
Provision of Information on Central Bank Expenditure Budgets.
Available for registered central bank users on https://e.bis.org
Bank for International Settlements (2004):
Record of the September 2004 Meeting of the Central Bank Governance Group.
The provision of services by central banks to government was the principal topic of discussion at this meeting.
Available for registered central bank users on https://e.bis.org
D Bevan (2005):
An Analytical Overview of Aid Absorption: Recognizing and Avoiding Macroeconomic Hazards.
Paper prepared for a high-level seminar on foreign aid and macroeconomic management,
Maputo, 14-15 March 2005. http://www.imf.org/external/np/seminars/eng/2005/famm/pdf/bevan.pdf
P van den Boogaerde and C Tsangarides (2005):
Ten Years After the CFA Franc Devaluation: Progress Toward Regional Integration in the WAEMU.
IMF Working Paper 05/145. http://www.imf.org/external/pubs/ft/wp/2005/wp05145.pdf
International Monetary Fund (2005):
Central African Economic and Monetary Community –
Paper on Recent Developments and Regional Policy Issues,
IMF Country Report 05/403.
http://www.imf.org/external/pubs/ft/scr/2005/cr05403.pdf
A Prati, R Sahay and T Tressel (2005):
Can Monetary Policy Make Foreign Aid More Effective?
IMF Research Department draft, 25 February 2005.
http://www.un.org/docs/ecosoc/meetings/2005/docs/Prati.pdf

62

63