For example, in Germany, the institution that became the highly independent Bundesbank was established as part of the country’s reconstruction after WWII and so before its new democracy was embedded. It had “goal independence”. And in the US, while there is hesitation over giving the Federal Reserve an inflation target, as great weight is placed by Congress on the “dual mandate”, there is not concern about the scope or mechanics of the FOMC’s accountability to Congress. Every member of the executive arm of the government is unelected except the President. The central bank is no outlier. 18 But in the UK it really was a novelty – in a way, a constitutional departure, foreshadowed perhaps only by the judiciary 19 – to give such a politically sensitive lever to a body of unelected technicians. The institutional obstacles to Bank of England “independence” therefore needed institutional solutions. Responsibility for bank regulation was transferred from the Bank in 1997. The pathway to resolution of the “democratic deficit” problem had potentially been opened up in the 1980s by the St John Stevas reforms of Parliamentary Committees which led, over time, to a Treasury Committee with a high reputation and standing, supported by access to expert advice. In the 1997 reforms, the sphere of politics was carefully delineated. The goal of price stability is set by Parliament in legislation; and, within that framework, the Chancellor of the day sets the Bank its target for inflation.
It is our sincere hope that this global forum will be rewarding and may the collective wisdom derived from the deliberations lead to more collective actions that will be to our increased mutual benefits. Let me once again express our appreciation to Yang Amat Berhormat Dato' Seri Abdullah Badawi for his presence here this afternoon and for accepting to deliver the keynote address at our Forum today. Thank you. 2  BIS Review 30/2007