National Bank Is Recognized as the Most Dependent Central Bank in Eastern Europe

01.06.2010 13:49
Архив Редакция

National Bank of Belarus is recognized as the most dependent on authorities central bank in Eastern Europe. That is the conclusion reached by experts of Russian Institute for Economy in Transition (IET), after examining the political and economic independence of central banks of 26 countries.

According to IET, the most independent central banks are the banks of European countries from the former Socialist Bloc and the Baltic states, and the most dependent — National Bank of Belarus, Uzbekistan and Ukraine, Vedomosti inform.

From the 16 maximum points, the highest rating of «independence» is given to the central banks of Hungary and Bosnia and Herzegovina (15 points). Belarus received the lowest rating — six points. Central Bank of Russia got 11 points and is situated on a level with Kazakhstan, Turkmenistan and Romania.

IET defined the political independence of the banks according to such criteria as the manner of the Central Bank top-management appointment and coordination of monetary policy with the government. Economic criteria were defined by independence in interest rate policy, terms of a loan issue for the government, lack of responsibility for banking supervision.

IET specialists noted that these criteria reflect only the formal degree of central banks freedom, not including the real. «Independent national banks are able to withstand the pressure from the government, and it works in developed countries, but in developing countries it’s not a fact, even if relevant laws are adopted there», the study co-author, Pavel Trunin, stressed adding that there is the difference in the institutes.

The experts also note that the study of the developed countries’ central banks activity confirms that the higher their independence, the lower inflation they have and, consequently, the better economic situation is in the country.

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