INDEPENDENCE OF THE CENTRAL BANK

Abstract

Today in the world, one of the key questions in the domain of finance is: are central banks (in)dependent and to what extent? At the same time, the independence of the Central Bank, as the country's highest monetary authority, means that it is institutionally independent, that it is operationally independent in the selection of monetary policy instruments (regulation), that there is independence of its administrative bodies from the legislative and executive authorities, and that it is financially independent . The answer to the above question also depends on the established model of functioning of the Central Bank, i.e. whether it is the model of the national Central Bank, the model of the supranational Central Bank, the complex model of the Central Bank or the model of the Currency Board. Therefore, the subject of analysis in this paper will be the functioning of the four mentioned models in the context of their (in)dependence. The representative of the first model was the Central Bank of Switzerland (SNB), the second model was the European Central Bank (ECB), the third model was the FED of the USA, and the fourth model was the Currency Board of the Central Bank of Bosnia and Herzegovina. Finally, a comparison of these models was made from the aspect of their (in)dependence.