Pablo Hernández de Cos: Testimony before Audit Committee on Democratic Quality, the Fight against Corruption, and Institutional and Legal Reforms

Testimony by Mr Pablo Hernández de Cos, Governor of the Bank of Spain and Chairman of the Basel Committee on Banking Supervision, before the Audit Committee on Democratic Quality, the Fight against Corruption, and Institutional and Legal Reforms, Congress of Deputies, Madrid, 22 December 2020.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
23 December 2020

Ladies and gentlemen,

I appreciate your request that I should appear before this Audit Committee on Democratic Quality, the Fight against Corruption, and Institutional and Legal Reforms to address the question of the impartiality and autonomy of independent economic authorities.

Allow me to take as a starting point for my address the importance the economic literature has attributed in recent decades to the quality of institutions, as a linchpin of economic development and growth.

As part of this broad notion of the quality of institutions, independent agencies – over which governments have no controlling or management powers – are particularly important for achieving certain goals. Indeed, in some areas of the economy independent institutions have a long-standing tradition in market economies and are a basic pillar of their institutional structure.

The rationale behind such institutions lies in considerations of general interest, with the conviction that independence allows a greater benefit to be had for society than that which would be attained were powers assumed directly by political authorities.