The central bank needs to be able to make policy without short term political concerns.
The more guidance a central bank can provide the public about how policy is likely to evolve the greater the chance that market participants will make appropriate inferences.
The Federal Reserve has an official commitment to two different policies. One is to prevent inflation from getting too high. The second is to maintain high employment... the European Central Bank has only the first. It has no commitment to keep employment up.
A Central Bank official said that Q-coin did not affect the renminbi; it adds vibrancy to the economy.
The principle that a central bank, charged with controlling inflation, should be independent from the government is unassailable. It may also be true that it's easier for the central bank to guard its independence from political pressure when it mainly holds government securities.
The job of the Central Bank is to worry.
What's brilliant about the United States system of government is separation of power. Not only the executive, legislative, judicial branches, but also the independence of the military from civilians, an independent media and press, an independent central bank.
Banks are concerned the central bank is imposing too many regulations. If the trend continues, we'll swing to heavy regulation. We need to have balanced regulation to encourage the economy.
Even the National Bank of Romania doesn't have the huge resources needed to intervene in the market and keep the leu at an acceptable level, because they're drawing close to a floor below which the bank's reserves can't drop. The central bank has to wait for a moment of calm to efficiently conduct its interventions.
The Central Bank should have a permanent window for discounting high quality securities where banks could go and discount these. It gives peace of mind to the banks. In the absence of this facility, what banks tend to do is to keep a liquidity cushion for emergency requirements. This is a very expensive way of managing liquidity.