It operates autonomously within a legal framework which affords it a substantial degree of independence, while remaining accountable to Parliament. But ultimately it is the appreciation by the public at large of the importance of financial stability, and their understanding of and support for the role of the Reserve Bank in this regard, that is needed to entrench and develop the Bank’s independence.
As Milton and Rose discussed in Chapter 9 of the 1980 edition of Free to Choose, popular views in the 1960s and 1970s (and even the views of some Federal Reserve  2  BIS Review 45/2003  officials) held that inflation could arise from a variety of non-monetary sources, including the power of unions and corporations and the greediness of oil-producing countries.