The central bank has often ignored him, raising rates massively when forced by markets, but it’s also been slow to act. The result is inflation at about five times the institution’s target, and a series of policy innovations that have frustrated investors.
INDIA
Prime Minister Narendra Modi’s administration has pressured the Reserve Bank of India to hand over more of its surpluses to bridge a budget gap and possibly fund spending before next year’s election. The government has also threatened to invoke a never-used law to provide more liquidity and ease lending rules amid a shadow-banking crisis, though it later said the RBI’s autonomy is “an essential and accepted governance requirement.”
The RBI warned that any threat to its autonomy will invite the wrath of financial markets, but ceded ground last month by allowing the government to review its capital structure. The government now wants to review its governance structure.
PAKISTAN
Pakistan’s government plans to make the central bank report any planned currency adjustments to a committee, a move seen aimed at curbing the regulator’s independence as the nation negotiates an International Monetary Fund bailout.
NEW ZEALAND
Legislation requiring the Reserve Bank of New Zealand to adopt a dual mandate of employment and price stability is expected to become law in April. Opponents say that could give the finance minister the power to influence which of the mandates the central bank should prioritize, undermining its independence.
The minister also gains the authority to appoint a new monetary policy committee, which will include external members, and creates the role of a non-voting Treasury observer to sit in on all committee decisions, raising the risk of too much influence.
U.K.
BOE Governor Mark Carney has long faced aggressive criticism from pro-Brexit politicians, who accuse him of overly pessimistic pronouncements and bias against the decision to leave the European Union. Lawmaker Jacob Rees-Mogg calls the governor the “high priest of project fear.”
Carney denies the charge, but was assailed again recently after the BOE published scenarios showing that a no-deal Brexit could unleash a savage recession and collapse in the pound.
EURO-AREA
ECB President Mario Draghi is frequently lambasted by German politicians over his ultra-loose monetary policy, which they worry robs the nation’s savers to the benefit of more-profligate member states. More recently he’s been attacked by Italian politicians, including Deputy Premier Luigi Di Maio who said he’s “ poisoning the climate” by weighing into the debate about the nation’s budget.
ITALY
National central banks within the euro area are also being hit. Italian Governor Ignazio Visco, who overcame a bruising public debate in 2017 to win a second term, is embroiled in the debate over the the populist government’s spending plans.