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<p>[QUOTE=&quot;Cloudsweeper99, post: 999145, member: 3011&quot;]<blockquote><p></p><p>&nbsp;</p><p>Let&#039;s review the paper you cite:</p><p><br /></p><p>&#039;&quot;Independence&quot; does not mean literally independence from government, because central banks here and abroad are almost always part of government. &#039;</p><p><br /></p><p>&quot;Most central banks have specific legislative mandates and therefore do not have goal independence. &quot;</p><p><br /></p><p>&quot;As I noted earlier, the Federal Reserve&#039;s independence is a product of congressional legislation and can therefore be diminished at the will of the Congress (with the President&#039;s approval and subject to override of any veto). The Congress must have such authority of its oversight of the Federal Reserve is to be credible and effective..., it ensures that the Federal Reserve is extremely respectful of the oversight authority of the Congress and provides some leverage for congressional influence on the conduct of monetary policy. &quot;</p><p><br /></p><p>&quot;Perhaps most important, the Congress has set the goals for monetary policy in law. In addition, the Senate confirms nominees to the Board of Governors, and individual Senators can hold up Board member confirmations in an attempt to influence policy and appointments. The Congress can, if it decides, pass legislation that directly requires a specific monetary policy action. The Congress can threaten to change the structure of the Federal Reserve--abolish the Federal Reserve at the extreme, or specify particular qualifications for Board members, or alter the composition of the FOMC--in an attempt to influence monetary policy. The Congress can demand an accounting of policy by summoning the Chairman, Board members, and Reserve Bank presidents to congressional hearings, in addition to the formal semiannual testimonies by the Chairman. &quot;</p></blockquote><p>[/QUOTE]</p><p><br /></p>

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