of governors are nominated by the president and confirmed by the senate. each reserve bank has a board of directors drawn from business, public, labor, nonprofit, and banking leadership within its district. in consultation with the board of governors, the reserve bank directors choose a president to run the bank. 5 the board of governors oversees the reserve banks and is responsible for formulating bank regulations ; supervising banks ; and making decisions regarding lending, other than discount window lending, to depository institutions. 6 the seven members of the board of governors serve 14 - year terms, with one term ending in january of each even - numbered year. the terms run independently of the person serving in them, and members are often appointed, as i was, to fill the unexpired portion of a term. as see alberto alesina ( 1988 ), “ macroeconomics and politics, ” in stanley fischer, ed., nber macroeconomics annual, vol. 3 ( cambridge, mass. : mit press ), pp. 13 – 62 ; vittorio grilli, donato masciandaro, and guido tabellini ( 1991 ), “ political and monetary institutions and public financial policies in the industrial countries, ” economic policy, vol. 6 ( 13 ), pp. 342 – 92 ; alex cukierman ( 1992 ), central bank strategy, credibility, and independence : theory and evidence ( cambridge, mass. : mit press ) ; alex cukierman, steven b. webb, and bilin neyapti ( 1992 ), “ measuring the independence of central banks and its effect on policy outcomes, ” world bank economic review, vol. 6 ( 3 ), 353 – 98 ; alberto alesina and lawrence h. summers ( 1993 ), “ central bank independence and macroeconomic performance : some comparative evidence, ” journal of money, credit and banking, vol. 25 ( may ), pp. 151 – 62 ; alex cukierman, pantelis kalaitzidakis, lawrence h. summers, and steven b. webb ( 1993 ), “ central bank independence, growth, investment, and real rates, ” carnegie - rochester conference series on public policy, vol. 39 ( 1 ), pp. 95 – 140 ; and alex cukierman, geoffrey p. miller, and bilin neyapti ( 2002 ), “ central bank reform, liberalization and inflation in transition economies – an international perspective, ” journal of monetary economics, vol.

year, liquidity policy has moved into the spotlight and has taken over the lead role at the forefront of the monetary policy scene. the current situation also highlights the close interaction between price stability and financial stability and that the focus of policy makers today is on crisis management. the challenge in the coming months and year is to pursue a dual approach consisting of short - term action and long - term solutions. we must constantly be on the alert to put out fires when and where they emerge, while studying the causes of the current crisis and finding the right long - term remedies in the form of new rules and systems so that we do not repeat the same mistakes. as the french saying goes, there is no point in putting a band - aid on a wooden leg. ecklund, gunhild ( 2008 ), creating a new role for an old central bank : the bank of norway 1945 - 1954, series of dissertations no. 2 - 2008, bi norwegian school of management. sejersted, francis ( 1994 ), on the so - called “ autonomy ” or “ independence ” of central banks. reflections on the norwegian case of minimal formal authority, tmv working paper no. 75, oslo : center for technology and culture ( tmv ). øksendal, lars fredrik ( 2008 ), essays in norwegian monetary history, 1869 - 1914, phd - dissertation, norwegian school of economics and business administration.