The IMF, Central Bank Independence and CBDCs

Tobias Adrian, International Monetary Fund (IMF) Financial Counsellor and Director of the Monetary and Capital Markets Department, spoke at the International Symposium on Central Bank Independence in Stockholm at the start of the year.

His topic was maintaining central bank independence alongside the development of payments and Central Bank Digital Currencies (CBDC).

The IMF maintains a database of central bank legislation. The legislation includes safeguards giving central banks independence so that they can pursue monetary policy goals without interference. Politicians, and others, often have short term goals and put popularity ahead of other factors, while delivering economic and financial stability can require unpopular action and take time.

Independence is also important to be able to act as the banking supervisor, including ensuring financial market structures such as payment systems work well. The Basel Core Principles and the Principles for the Financial Market Infrastructures seek to ensure this independence. But should central bank independence also cover its work on CBDCs?