Indeed, we believe it is an important provision reinforcing the legitimacy of the central bank’s task. But it is clear that both models are viable and can operate effectively in their particular circumstances. Before leaving the subject of central bank independence, I should touch on one other important question - the funding of the central bank.
The banking sector which dominates our financial system (it controls more than 90 per cent of financial assets) had traditionally catered to the needs of the Government for meeting their deficit financing, or to the large and well established corporate sector and also financed international trade.