The westernmost of the transition countries have typically liberalised the most, adopting policies and structures which are already very close to those of their EU neighbours; while, further East, reform and market-based operations are still viewed with some scepticism (everyone of course pays lip service to the benefits of and need for market reform and structural adjustment, but many do not in their hearts believe it will work for them), and the markets that have been introduced are subjected to discretionary administrative controls - particularly in crises. Partly because of the influence of the IMF and other western advisers as well as, in the case of EU applicants, the need to harmonise with EU law and practice, the legislation governing the new central banks usually follows a common model, giving them autonomy to pursue an objective of monetary stability. What is interesting is that the aspects of monetary control whose merits we debate in the west - the degree of independence of the central bank, inflation targets versus monetary targets, fixed or floating exchange rates - have in terms of results been of secondary importance to the understanding and acceptance of the case for reform on the part of the public, parliament and government. There is little benefit to a central bank BIS Review 33/1997  -6-  being independent of government if the parliament is able to force it to grant subsidised credits to favoured sectors.
It is unlikely to make sense to have 15 (and certainly not 25) teams of economists analysing the causes of changes in the velocity of euroM4. But I do not wish to give the impression that EMU, even if it comes about on something roughly approaching the current timetable, will be the ‘end of history’ as far as European central banking is concerned. I suspect that central banks in Europe will continue to display great diversity, and will continue to evolve in different directions, and at different speeds, in response to the characteristics of their local habitat. What is important is that they should be responsive, learning and self-critical organisations, ready to react quickly to changing circumstances. They must also, in my view, display their accountability, perhaps more so than in the past. With the greater responsibilities which European central banks, East and West, have assumed in recent years, comes a greater need to explain the basis on which decisions are made, and to account for the resources deployed in making those decisions. That accountability runs partly to the Treasury, who exercise financial discipline over us, partly to Parliament - whose growing interest in our affairs we welcome - and partly to the broader community. I see this series of lectures fitting within that context, and have been pleased this evening to have the opportunity to set out some more recent reflections, from within the Bank, on the way we exercise our functions on the people’s behalf.