Moving the role of ‘Chief Economist’ towards the director of the ‘Economic Department’, and letting him be more independent of any particular body member (making him responsible to the decision-making body as a whole), can help to solve this problem of information filtering. Openness is a consequence of ‘staff independence’. Allowing staff to be more independent at the same time requires the decision-making body members to take an active approach towards the analysis produced by the staff. Since a perfect understanding of the message contained in the ‘policy documents’ is a prerequisite for proper policy conduct, interaction between the decision-making body members and the staff should be assured at different levels. And finally, a need to deal with uncertainty properly arises as a consequence of the uncertainty surrounding monetary policy practice. Therefore, it is highly desirable to discuss the implied risks at different levels: (i)  First, the risks should be discussed by the staff. (ii)  Second, an evaluation of the risks should be performed interactively by the decision-making body members and the staff (alternative scenarios can be produced on the basis of these discussions). (iii)  Third, the risk and the alternative scenarios should be discussed by the decision-making body members during the policy meeting. It is clear that all the above-mentioned properties can be satisfied when either a Bank Board or a Policy Committee are making the decisions. Over the years it has been proven that both systems can work well.
Zdeněk Tůma: Monetary policy governance - comments on the institutional set-up of inflation targeting in Albania Speech by Mr Zdeněk Tůma, Governor of the Czech National Bank, at the Bank of Albania Open Forum on "Preconditions for launching inflation targeting in Albania", Tirana, 1-2 December 2005. *  *  *  Monetary policy is without any doubt one of the most powerful tools for macroeconomic management. While the theoretical background for target-setting is well established, the task of making practical arrangements for conducting policy in order to achieve targets in an efficient way is certainly a very difficult one. Designing a well-functioning system for decision making is thus at the very top of the agenda for any central bank striving to establish a sound monetary policy framework. It is therefore highly commendable that the Bank of Albania is addressing the related issues well in advance. Today, I would like to make several comments on the issues where I feel the Czech National Bank can pass on some observations and know-how based on its almost eight-year experience with decision making under an inflation targeting regime. The discussion about the proposed institutional set-up in Albania provokes a more general debate about the properties of the ‘ideal’ monetary policy decision-making system. Such a discussion of this general issue could reveal some practical implications for the Bank of Albania.