close harmony with the government ”. accordingly, a degree of independence has been afforded to the central bank unlike other governmental bodies. this independence extends to the budget of the bank, job security of key central bank officials and power to make monetary policy without consulting the government. the wisdom of exter was that the central bank should as far as possible work in consultation with the government, rather than in isolation. he believed that the true independence of the central bank could be preserved only through that consultative process. in the words of exter, “ the ideal is …. one in which there will be continuous and constructive cooperation between the monetary board and the government. the principal instrument for achieving this co - operation should be the permanent secretary to the ministry of finance whose membership on the board will ensure at all times that his minister ’ s views will be known to the other members of the board ”. however, exter did not expect this arrangement to be effective at all times. hence, he made the proviso that “ it would depend on the men occupying the key positions ” and not on any legal formula. he argued quite correctly that such complex and delicate relationships cannot be established full - blown by a piece of legislation. it must be the result of years of experience and the slow growth of political conventions. exter report testifies to the fact that the independence of the central bank should be attained and maintained by people in both the central bank and the ministry of finance and working with a “ moral consciousness ” regarding the well - being of the whole society rather than narrow self - interest objectives. conclusions six decades is a long period during which a society should necessarily undergo tremendous political, social and economic transformation. the onslaughts of new technology, globalization and advancements in fast communication systems have changed the ideals of the people of all societies throughout the globe. hence, one may tempt to question whether the ideals expressed by exter more than a half a century ago are still valid and relevant. though the ideals of societies have changed, the core principles that are embodied in the philosophy of central banking have not changed over the time. in fact, they have become much more hardened today than 60 years ago. nations throughout the world have gone for price stability as a necessary prerequisite for continuous prosperity. hence, the hands of central bankers have been strengthened much more today in all parts of the world to facilitate central banks to function independently and make appropriate policies for monetary stability. the wave of modernization that has swept over almost

threatening global financial stability with self - reinforcing effects. on the opposite, prompt and clear policies can limit risks and help countries attracting the resources needed to finance their low - carbon transition. most studies suggest that the economic impact of the “ green transformation ” will be positive in the long run. the short run, however, will see a significant reallocation of labour across sectors and regions. the transition will be especially tough for developing economies, as they face an increasing thirst for energy, driven by industrialisation and rising consumption. these difficulties add to those caused by the pandemic crisis, which is already reversing the progress made over the last few years in the fight against extreme poverty and energy poverty. i believe that a lot, therefore, needs to be done to ensure not only a transition to netzero, but also a just transition. adequate investment in skills, active labour market policies and modern social protection systems will be crucial to make sure that nobody is left behind. the progressive phasing out of fossil - fuel subsidies – often regressive in nature – can increase the fiscal space of developing countries and provide them with fresh resources, which can then be directed to improving the energy access of the most vulnerable. the recourse to innovative financial instruments such as debt - for - nature swapscould help to reduce the debt of developing economies and to raise funds for conservation projects and increasing the stock of carbon dioxide natural removals. in moving towards a greener world and a safer planet we must not repeat the mistakes made when globalisation took place : the impact on the most fragile workers and vulnerable segments of the population should be always accounted for in the design of climate policies. this will not be forgotten by the g20, whose finance ministers and central bank governors recently stated that shaping the recovery from the pandemic “ provides a unique opportunity to develop forward - looking strategies investing in innovative technologies and promoting just transitions toward more sustainable economies and societies, with particular attention to the most affected segments of the population and in line with the paris agreement ”. 7 / 7 bis central bankers'speeches