Central bank accountability and judicial review

Independence and Accountability Independence in the context of central banking is not absolute, but relative. Independence is freedom from political instruction on the one hand and from financial markets on the other hand (the central bank acts in the public interest while financial market participants are driven by private interests). This double dimension goes hand in hand with their dual role as government’s bank and bankers’ bank. However, what is considered to be ‘lack of dependence’ has nuances across central banks, across jurisdictions, across time and across functions. Between full independence and full dependence there is a gradation with various degrees of operational autonomy (etymologically autonomy means the ability to give norms to itself) and control. Accountability is not simply an ‘add-on’ to justify independence. Hence the term ‘accountable independence’. Accountability - ex ante and ex post - is a constitutive part of the design of an independent agency in a democratic system, whose aim is to bring back the central bank to the system of checks and balances, (trias politica).