Már Gudmundsson, Governor, Central Bank of Iceland: Comments on Harold James: Central Banks: Between Internationalisation and Domestic Political Control

• Main Authors: It Professor, Harold James In
• Other Authors: The Pennsylvania State University CiteSeerX Archives
• Format: Text
• Language: English
• Subjects: Iceland
• Online Access: http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.225.4512; http://www.bis.org/events/conf100624/gudmundssoncomms.pdf

comments, I would like to focus on four key points that I took away from Professor James’ paper: 1. Autonomous or independent central banks are more likely to exist in federal systems of government. 2. Central banks ’ status and independence are subject to cycles related to financial and economic crises. 3. There is a tension between international co-operation among central banks and domestic political control that becomes more pronounced in the aftermath of a crisis. 4. As we currently find ourselves in the aftermath of a deep financial crisis, the situation will be more challenging for central banks than it has been in the recent past. They face more critical domestic scrutiny, and there is a larger risk that central bank independence will be undermined and central bank cooperation questioned. All of the above points are convincingly argued and well illustrated by the case study of European monetary integration, which is interesting in its own right. However, I think that