This exception allows an independent institution outside the normal process of democratic and political accountability to be entrusted with authority for monetary policy only under the condition that it has a clearly defined mandate allowing the public to hold it accountable for the performance of the technical tasks assigned to it by the legislator. The clearer and narrower the mandate of a central bank is, the easier it is for the citizens to monitor its performance. [16] In the case of the ECB’s monetary policy, the Treaty sets out, in very clear terms, that the primary objective of the ECB is to maintain price stability. Also, the permissible rate of inflation is quantified by the ECB through the Harmonised Index of Consumer Prices (HICP), which is easy to understand and is updated at frequent intervals. [17] On the other hand, with the conferral of new functions and tasks on the ECB, multiple objectives may arise, which may obstruct the accountability process and, ultimately, compromise the democratic legitimacy of central bank independence. Since the independence granted to a central bank is an exception to the general rule that public administration should be subject to scrutiny and oversight by democratically elected institutions, the scope of a central bank’s independence should be interpreted narrowly and may not be automatically extended to other policy areas.
In particular, in its supervisory activities, the ECB must apply all relevant Union law and, where the Union law is in the form of directives, the national legislation transposing those directives. [25] The ECB is also subject to binding regulatory and implementing technical standards developed by the European Banking Authority (EBA) and adopted by the Commission[26] and to the EBA’s powers to resolve disputes between competent authorities in a legally binding manner. [27] While the ECB is consulted on draft legislation within its fields of competence, the ECB is not a supervisory policymaker and its supervisory tasks, although entailing discretionary judgement, focus on the implementation and enforcement of supervisory policies and rules established by democratically accountable institutions. Even though operational independence is of importance to the http://www.ecb.europa.eu/press/key/date/2017/html/sp170330.en.html[03.04.2017 15:53:14]  Central bank independence revisited  manner in which these tasks are carried out, the fact that a supervisor is required to act in response to decisions made by, or in cooperation with, policymakers and other supervisors means that the high level of protection from external influence that is guaranteed under Article 130 of the Treaty is not appropriate for these tasks. The provisions on independence in the SSM Regulation are similar to Article 130 of the Treaty, but serve a different purpose. The personal and instrument independence are also different.