But for effectiveness, credibility is essential, and therefore legislators must want a credible central bank. Credibility hinges on independence: the central bank should not be subject to fiscal or political dominance and should be free to choose the instruments that are most appropriate to deliver its mandate.
Legislators should therefore protect the independence of central banks, as it is essential for fulfilling the mandate that they themselves have defined. The distributional consequences of monetary policy, if there are any, and other risks such as moral hazard and financial stability, must be addressed by other tools.