Monday, November 21, 2011

BIS - Issues in the Governance of Central Banks

Issues in the Governance of Central Banks
A report from the Central Bank Governance Group Chair: Guillermo Ortiz, Governor of the Bank of Mexico May 2009
Electronic version; contains minor updates up to 25 May 2009.

"...9. Provisions relating to legal action against the central bank and its officers
The central bank’s statute should provide for protection from arbitrary legal challenges to its policy actions from interest groups. At the same time, however, the law needs to provide for a legal means to check any inappropriate behaviour of the central bank. In most countries, private parties are permitted to bring legal action against the central bank. The area where the greatest number of cases are brought to court is bank supervision, though there are a few, comparatively rare cases involving monetary policy decisions or the ownership of gold and external reserves (claimed by private shareholders). The manner in which the central bank is established in the law will have a direct bearing on the type of legal action that is permissible. For instance, the Reserve Bank of Australia is established as a body corporate able to sue and be sued, which is the norm for this legal form. The central banks of India and Singapore, also bodies corporate, have explicit provisions that prevent the possibility of a suit against the central bank..."


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