– https://www.ecb.europa.eu/press/key/date/2019/html/ecb.sp191112_1~f304b47e14.en.html  3/9  Mechanism (SSM) in 2014, the Banco de España’s supervisory role was integrated into a new institutional framework with the European Central Bank at its core. I will come back to this function later on. Some lessons on central bank independence Let me share with you some reflections about central bank independence nowadays. This will be in the form of five lessons which, in my view, should be kept in mind when thinking about central bank independence, particularly at the current juncture of seemingly tamed inflation but with difficulties in achieving price stability objectives in some advanced economies. 1. Institutional settings matter First, I would state that independence, to be effective, must rest on a robust legal and institutional framework. Independence must be formally recognised in all of its relevant dimensions: namely, at the institutional, functional, personal and financial levels. This is the case in the euro area, where the Maastricht Treaty4 provided the appropriate framework; but unfortunately it is not the case in other regions, thus making the task of central banks much more complicated. 2. The need to deliver Second, the main reason for central bank independence is a utilitarian one: independence is an instrument to enhance effectiveness in order to achieve agreed objectives in the general interest, such as price or financial stability. The social value of central bank independence is thus inextricably linked to the effectiveness of its policies.

Yet allow me to emphasise that, in parallel, central banks have strengthened transparency by providing the general public with extensive information about the rationale behind these monetary policy measures within our existing mandates. In particular, in the case of the Governing Council of the ECB, the accounts of our monetary policy meetings are published and the President and Vice-president hold a joint press conference with a Q&A session after each decision. In addition, members of the Governing Council routinely engage in public events and deliver speeches to explain our decisions and the rationale behind them. And, of course, the President of the ECB regularly participates in sessions with members of the European Parliament as do governors of national central banks in their corresponding parliaments. I deem it essential to persevere in this direction to reinforce the democratic accountability of the central bank. In communication with the public, central banks should carefully balance the need for clarity and the intrinsic complexity of monetary policy decisions. To strike the right balance it is worth noting that transparency does not mean providing certainties on intrinsically complex issues but clarity on the inevitable uncertainties and trade-offs that affect monetary policymaking. An added difficulty in the euro area is having to communicate to citizens from 19 different countries in which public opinion sometimes focuses more on national affairs than on European issues. On top of high transparency standards, we should explore additional tools that could contribute to reinforcing the legitimacy of an independent public institution.