Vendors and service providers need to be flexible to pass on the benefits of technological advances to a larger group of users. Demand driven innovations should also be promoted and vendors should look for volumes and turnover, rather than high-priced software sales. 5. Agenda for SAARC region payment systems development  5.1 The banking community in India as well as in other SAARC countries need not reinvent the wheel. There is good news. Following a request made by the SAARC country  BIS Review 61/2008  7  Governors, a SAARC Payments Initiative has been set up to take forward the payment reforms in the region. Within this Initiative, a SAARC Payments Council (SPC) has been set up, consisting of high level officials from SAARC central banks who are also the Chairpersons or senior members of their national payment councils. SPC will be the policy making authority for both high value and retail payments. The organisational structure is considered a very practical one, because of the involvement of all national stakeholders in the national payments councils, which will provide a good forum for the banking community and all service providers to give their inputs for retail payments developments in their own countries, as well as in the region. Currently, Sri Lanka chairs the SPC and a Secretariat has been set up in Colombo to facilitate operational processes. SPC has already prepared a road map for the first year and a rolling plan for the medium term. 6.
This gives the Fed more latitude not to tighten when inflation rises for transient reasons – say, due to a short-lived spike in oil prices – and more scope to ease credit to support the economy during economic downturns. Recognizing these benefits, Congress wisely acted many years ago to exempt monetary policy decisions from the GAO’s wide powers to review Federal Reserve activities. Congress’ decision to bolster the Fed’s monetary policy independence has been followed by similar actions around the world – substantial independence for the central bank in the conduct of monetary policy is now widely regarded as international best practice. Policy independence does not absolve the Federal Reserve from accountability for its monetary policy decisions and the need to clearly explain why they were taken. But it avoids the politicization of monetary policy decision-making. And this is good because politicized central banks generally do not have enviable records with regard to inflation, economic growth or currency stability. Risk premia on financial assets are typically much higher in countries with politicized central banks. Of course, a reversal of Congress’s earlier decision would not amount to legislative control over monetary policy decisions. That’s not the issue. The issue is that a reversal of Congress’ earlier decision could create the appearance that the legislature seeks to influence monetary policy decisions by establishing a mechanism to publicly second guess those decisions. Such a move would blur what has been a careful separation of monetary policy from politics.