Central Bank Governance Forum

Central Bank Governance Group

The Central Bank Governance Group is a grouping of governors that serves as a venue for the exchange of views on matters of interest relating to the design and operation of central banks, and establishes criteria and sets priorities for the work on central bank governance that is carried out through the BIS and the Central Bank Governance Network. The focus of the governance work is the institutional and organisational setting in which central banks pursue monetary and financial policies, not these policies themselves. The Group dates back to 1997 and meets as needed, normally at intervals between three and six months.

The group is currently chaired by Mr Guillermo Ortiz (Bank of Mexico). Its members are Mr Stanley Fischer (Bank of Israel), Mr Mervyn King (Bank of England), Mr Donald Kohn (Board of Governors of the Federal Reserve System), Mr Tito Mboweni (South African Reserve Bank), Mr Lucas Papademos (European Central Bank), Mr Y V Reddy (Reserve Bank of India), Ms Zeti Akhtar Aziz (Bank Negara Malaysia) and Mr Zhou Xiachuan (People’s Bank of China).

At its meetings, the group decides on priorities for work on governance issues, reviews the results of work undertaken, and discusses topical issues in the area of central bank governance. On occasion, the group invites other governors with a particular interest in a subject to participate in its meeting. Issues that it has identified are also discussed by wider groupings of governors.

Network on Central Bank Governance

The network on central bank governance is an informal mechanism to facilitate the flow of information on central bank governance issues between central banks and the BIS. About 45 central banks are currently represented on the network. Since its inception in the autumn of 1999, the network has played an increasingly important role, in the following ways:

• A significant part of the requests for governance information received from central banks by the BIS are time-sensitive and detailed. To the extent they cannot be met from existing information, the members of the network have played a very valuable role in responding to ad-hoc surveys conducted by the BIS to collect the required information. The resulting tailor-made, up-to-date answers to urgent requests for information have been valuable to central banks, and provide a valuable addition to the database on governance issues that is maintained by the BIS.
• Network members are invited to turn to the BIS for governance information needed by their institution. If the information is not readily available, the network member and the BIS decide whether it can best be obtained by the member turning to individual other members, or if an ad-hoc survey among the whole network is useful and warranted. If network members turn to other members for information directly, they are encouraged to keep the BIS informed and let it have a copy of the information obtained where possible. This allows the BIS to serve as a clearing house if similar information is sought by others in the future, and will highlight issues that may warrant more systematic or in-depth work.
• Network members provide input to the Central Bank Governance Group on governance matters that are of particular current interest to their institutions, to help inform the Governance Group when it sets priorities for gathering and analysing information.

Surveys and Analysis on Central Bank Governance Issues

Whenever a request for governance information from a central bank cannot be met from existing material, if the issue warrants it and resources permit, the BIS will seek to collect the information (often in an ad-hoc survey among the governance network) and to put it in context in a focused analytic note. These directly demand-led notes have proven very useful to central banks, and there has thus been some shift of emphasis away from longer-term, in-depth projects on governance issues to such work.

Electronic compendium on Central Bank Governance

Much of the central bank governance information that is available at the BIS can be accessed (by registered users) on the password-protected eBIS platform (https://e.bis.org). Central bank officers and staff are very welcome to register for this facility by completing a registration form, which may be requested by sending a brief e-mail to cbgovernance@bis.org.

Illustrative list of issues addressed in the work on central bank governance

Legal foundations of the central bank; governance and accountability

• Collection of central bank laws
• Legal status, objectives and ownership of central banks
• Various aspects of central bank independence and accountability
• Central bank boards: role, composition, appointment mechanisms
• External communications activities of central banks

Mandates and functions of central banks

• Overview of functions and activities of central banks
• Central bank functions, structure and processes

Governance-related aspects of monetary and exchange rate policy

• The composition of monetary policy councils
• Governance aspects of using an inflation target or objective
• Involvement of central banks in exchange controls
• Payment of interest on minimum reserve balances

Governance-related aspects of financial stability and supervisory responsibilities

• Central bank involvement in safeguarding financial stability
• How central banks use and obtain supervisory information
• Direct costs of banking supervision and surveillance

Central bank balance sheet, reserves management

• Balance sheet strength, profitability and central bank policy
• Central banks' approaches to selected accounting and evaluation issues
• Legal provisions on the transfer of central bank profits

Structure and organisation of the central bank

• Organisation charts of central banks
• Organisational change at central banks: areas of change, reasons for change, the management of change

Human resources and related issues

• Central bank staff numbers
• Central bank approaches to salary and compensation issues; salaries of central bank governors
• Codes of conduct for central bank staff
• Enhancing performance and improving efficiency at the central bank
• Expenditures on staff training and development

Specific activities and internal services

• Costs of managing the circulation of bank notes
• Central bank practices concerning selected security aspects