wealth channel may be playing a disproportionately larger role than in the past. the distributional impact of the wealth channel may well be larger than that of other channels of monetary policy transmission. if the distributional impact of monetary policy channels is larger now than it was in the past, this can compromise the legitimacy of instrument independence. financial stability and independence stan and i also addressed the question about goal dependence coming from the standard macroeconomic perspective of the day. one aspect that has changed post - crisis is the heightened focus on the financial stability goal of central banks. the bank of england is a prime example of this. one question that arises is how the financial stability goal interacts with the inflation target. is it a separate goal for the central bank that sets up potential trade - offs or is it aligned with the inflationtargeting goal? if it is separate, should the central bank have independence in how it defines the goal of financial stability? should it have complete instrument independence as to how it pursues that goal? the goal of financial stability has generally been left vague. to some extent, it has been defined only in the negative. that is, we can all agree that financial instability was present in 2008 and that was not a good state of affairs. but it is much harder to get agreement on what are the important elements of financial stability and how central banks should go about achieving them. the longlasting, and still very active, debate about whether the central bank should lean against the wind is the best example of this. it brings to the fore a number of issues : is there a trade - off between the inflation target goal and the financial stability goal? does the goal of financial stability need to be better defined than it is at the moment? if so, by whom? should the central bank have complete independence to pursue its goal of financial stability with whatever instruments it so chooses, including when the distributional implications of some of those instruments are much starker? the questions do not have a straightforward answer. i would hope they would be a hot topic for phd students today in the way that central bank independence was when adam posen and i were phd students. accountability one of the points that stan and i were at pains to stress was the importance of central bank accountability. it is the very bedrock of central bank independence in a democratic society. it alleviates the criticism that central bank independence is inappropriate because macroeconomic policy decisions are being taken by unelected bureaucrats.

speech central bank independence in retrospect guy debelle [ * ] deputy governor address at bank of england independence : 20 years on conference london – 28 september 2017 it is a pleasure to be here today to celebrate 20 years of central bank independence for the bank of england. i have been tasked with discussing central bank independence in retrospect. in part, this is because a little more than two decades ago, stan fischer and i wrote about central bank independence in prospect and posed the question : how independent should a central bank be? when we asked that question in 1994, central bank independence was all the rage. i wrote my phd dissertation at mit on it, under stan's expert tutelage. a bit further up mass ave, adam posen was writing his phd dissertation at harvard on the very same issue. in new zealand, the government had established a new framework for independence for the reserve bank of new zealand ( rbnz ) in 1989, which granted the rbnz significant independence, including making the governor directly accountable for any failure to achieve the price stability objective. the framework for the european central bank ( ecb ) had just been established, which legislated a very high degree of central bank independence. looking back, that may have been the high - water mark for central bank independence. though, of course, the bank of england's independence was still to come, so perhaps that was the apogee! fast forward to today and central bank independence is no longer in the ascendancy. its legitimacy and effectiveness are under scrutiny. is this ‘ the end of the era of central bank independence ’? the answer to that question is no, in my opinion. the reason why has a lot to do with the answer that stan and i proposed in answering the question of how independent should a central bank be. we made the important distinction between goal and instrument independence, arguing that central banks should be goal dependent but have instrument independence. that is, the goal ( s ) that the central bank is pursuing should be determined by the political process. but, once given the goal, the central bank should be able to pursue the goal as it sees fit, with appropriate accountability. that distinction we drew between the two aspects of independence stands up to scrutiny twenty years on. if anything, i would argue that the experience of the past two decades serves to reinforce our conclusion, with the bank of england's own experience being a prime example. in my remarks today, i will first rev