##nimity of views between the government and the central bank. the relationship between the two institutions has not until now been characterised by this situation, called by the experts instrument independence. the difference of opinions was increased by the lack of confidence between the government and the management of the central bank. this was reflected in that the central bank expressed serious criticism of government policy in issues that were not related to the remit of the central bank as defined by law. on the other hand, the governing parties tried to influence monetary policy also during implementation. naturally, the central bank must be accountable. just like any other company limited by shares, it must manage its resources cost effectively. in the central bank there should be a responsible manager who is answerable for operation and financial efficiency, while the owner of the central bank, the hungarian state, should supervise its management. as regards the administration of monetary policy, however, the accountability of the central bank needs to be placed on another footing. clear targets that the government supports as well need to be set, but the central bank should be afforded the opportunity of using its best expertise in employing the instruments available to achieve these jointly set goals. the governor of the mnb should not be called to a parliamentary hearing when the monetary council raises interest rates but when reaching the target set for inflation is in jeopardy. iv. independence of the government and the central bank does not mean there should be no room for coordination, that we should disregard each other ’ s plans and measures in fashioning our own policy. if possible, we should strengthen favourable processes but, perhaps even more importantly, we should counteract the impacts that could drive the economy off its jointly plotted course. a monetary policy that works efficiently can best support achieving the government ’ s objectives by more stable growth, a predictable economic environment and the lower risk premium this engenders, which is also reflected in the reduction of the costs of financing the national debt. v. in order to make this mutual consideration of each other and working for common goals as fruitful as possible, as well as to allow the other players in the economy to profit to the greatest extent possible from this, the government and the mnb must adhere to the same two basic values. our activity should be efficient and predictable. the speeches made during the day serve as a guide as to how the government can improve the efficiency of its expenditure. introducing a fiscal regulation strengthening long - term predictability – reducing implementation risks of fiscal policy – would be of major significance

of monetary policy, decisions made by a body are more effective than those made by individuals as the members can deal with the information more effectively and can represent more aspects jointly. at the same time, the marginal utility derived from increasing the number of members beyond a certain point falls quickly, indeed may become negative, as in a large organisation agreeing positions becomes exceptionally complicated and time - consuming ; beyond a certain level there is no opportunity to find a consensus acceptable to everyone. this is why i believe that in the long term it is necessary to reduce the number of members of the monetary council. as we have also heard, in a country the size of hungary with a nonfederal system, a 5 to 7 member monetary council is thought to be optimal. x. another important aspect regarding the efficient and predictable operation of the monetary council is continuity. one way to promote this is for the members of the monetary council to change gradually over several years. it would be practical to implant this into hungarian practice by changing at most 1 or 2 members each year. xi. last but not least, at the central bank, as in every organisation, a balance needs to be created between corporate and individual decisions and responsibilities. while approval of strategic decisions is more fortunate when made by a body, one body making a decision whose implementation encroaches on the competence of another body within the institution needs to be avoided. it is more efficient if in the area of implementing corporate decisions and in the direction of everyday work individual responsibility is placed in the foreground. xii. clarifying the goals, accountability and an efficient decision - making structure. these are the conditions that produce the appropriate institutional framework for the efficient and predictable running of the central bank, and efficient co - operation with the government. i believe that the lessons of our conference today will find support in both legislation and in government circles as an efficiently working monetary policy facilitates the ability to plan and achieve budgetary targets, and helps the hungarian economy meet the prerequisites for acceding to the eurozone as speedily and at the price of as few sacrifices as possible. thank you for your kind attention. goodbye.