where DirectorsGeneral, the governing bodies at the proposal of Directors-General or persons responsible for their subsidiary bodies, by delegation or substitution, have made or informed decisions in connection with those banks) Absolute prohibition: banks supervised by the Banco de España or in their economic group, and banks or associations representing the collective interests of the former Private banks, or banks in the same group, affected by decisions in which they have participated  President  3 years  Members  2 years  Any other financial institution, and any entity engaged in lobbying in relation to the ECB, or consultancy and/or advocacy for the ECB, or for financial institutions Counterparties to the Eurosystem in monetary policy or foreign exchange operations Payment or settlement system operators, central counterparties and providers of payment instruments subject to ECB oversight  Significant or less significant credit institutions  Any other financial institution and any entity engaged in lobbying in relation to the ECB, or consultancy and/or advocacy for the ECB, or for financial institutions Counterparties to the Eurosystem in monetary policy or foreign exchange operations Payment or settlement system operators, central counterparties and providers of payment instruments subject to ECB oversight Lobbying its members or staff in connection with matters for which they were responsible within their portfolio Lobbying its members or staff in connection with matters for which they were responsible within their portfolio 10  ANNEX 4 – Governor mandates in European countries: terms of office and renewability Term of office, assuming one renewal,  NCB  Governor’s term of office  Renewable  BE  5 years  YES  10 years  DE  8 years  YES  16 years  EE  7 years  YES  14 years  IE  7 years  YES  14 years  GR  6 years  YES  12 years  ES  6 years  Non-renewable  6 years  FR  6 years  YES (once)  12 years  IT  6 years  YES (once)  12 years  CY  5 years  YES  10 years  LT  5 years  YES (unlimited)  10 years  LV  6 years  YES (unlimited)  12 years  LU  6 years  YES  12 years  MT  5 years  YES  10 years  NL  7 years  YES  14 years  AT  6 years  YES  12 years  PT  5 years  YES (once)  10 years  SI  6 years  YES  12 years  SK  6 years  YES (once)  12 years  FI  7 years  YES  14 years  ECB  8 years  Non-renewable  8 years  UK  8 years  Non-renewable  8 years  if allowed  NOTE: The power to renew terms of office has not been used in SI, MT or CY, while it has been used at least once in DE, AT, BE, EE, SK, LV, LT, LU, FI, FR, GR, NL, IT and PT (and in IE prior to the existence of the Eurosystem).

Indeed, regardless of whether decisions are taken by a general Bank Board or a specialized Policy Committee, the ‘ideal’ system for decision-making should encompass the following basic properties: a)  diversity of opinions  b)  regularity  c)  separateness  d)  staff independence  e)  openness  f)  dealing with uncertainty  Diversity of opinions is a consequence of the basic lesson we have learnt from the history of monetary policy. Milton Friedman said in 1968: ‘The first and most important lesson that history teaches about what monetary policy can do – and it is a lesson of the most profound importance – is that monetary policy can prevent money itself from being a major source of economic disturbance’. This implies that relative smoothness in practical decision making seems to be desirable for any monetary policy practice. In this regard, international experience and experimental research1 have shown that decisions taken by a ‘decision-making body’ seem to be superior ex post to decisions taken by an individual, as the latter are more vulnerable to sudden changes in monetary policy stance. It is argued that a significant improvement in policy conduct can be associated with policy makers learning from each other’s decisions. Regularity means not only that the decision-making body should meet on a regular basis, but in particular that the decision-making process should be taken in a standard framework and should be based on a standard set of policy documents.