2. Independence of Central Banks What is it ? Why is it ? -To maintain price stability. Reasons for Independence : Breakdown of price stability offering institutes like Bretten woods. Success of Bundesbank bank. Maastritch treaty.

3. Independence continues… Types of Independence Personnel independence Financial independence Policy Independence Legal Independence

4. Some facts The chairman of the U.S. Federal Reserve Bank is appointed by the President of the U.S.and his choice must be confirmed by congress. The RBI is not constitutionally independent. The government is also permitted to supersede RBI if it believes the central bank has failed to carry out its obligations. Bank of England nationalised in 1946. In 1997 it became an independent public organisation, wholly owned by Government, with independence in setting monetary policy.