Front Matter

Front Matter

Marc Quintyn, Eva Hüpkes, and Michael Taylor
Published Date:
March 2006
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The IMF launched the Economic Issues series in 1996 to make the IMF staff’s research findings accessible to the public. Economic Issues are short, nontechnical monographs on topical issues written for the nonspecialist reader. They are published in six languages—English, Arabic, Chinese, French, Russian, and Spanish. Economic Issues reflect the opinions of their authors, which are not necessarily those of the IMF’s Executive Board or management.

© 2006 International Monetary Fund

Series editor

Asimina Caminis

IMF External Relations Department

Cover design and composition

Massoud Etemadi and Julio Prego

IMF Multimedia Services Division

ISBN 9781589064775

ISSN 1020-5098

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The idea that central banks should be independent from government has gained wide acceptance in the past few decades. Experience has shown that political interference in monetary policy often has undesirable economic consequences. But policymakers are still reluctant to grant independence to the agencies that regulate and supervise the financial sector. One reason is the fear that regulators and supervisors, with their wide-ranging responsibilities and their power to penalize those who do not comply with regulations, could become a law unto themselves.

To guard against this danger, regulatory and supervisory agencies must be held accountable for their actions. Accountability arrangements would enable the public to exercise oversight over the agencies, thereby encouraging the agencies to adhere to high standards of governance and performance and enhancing their legitimacy. Drawing up accountability arrangements is more complex and more difficult for financial regulators than for central banks. But such arrangements are needed to ensure that regulatory and supervisory agencies behave responsibly and fairly toward all their stakeholders and to prevent any single stakeholder from wielding undue influence or control.

This pamphlet, prepared by David Cheney, is a companion piece to Economic Issue No. 32, Should Financial Sector Regulators Be Independent? which is available on the IMF’s website. It is based on IMF Working Paper 05/51, “The Accountability of Financial Sector Supervisors: Principles and Practice,” by Eva Hüpkes, Marc Quintyn, and Michael W. Taylor, which is available at The authors have also published articles on this subject: “Regulatory accountability: do’s and don’ts,” in The Financial Regulator, Vol. 10, No. 1 (June 2005), pp. 23–30; and “The Accountability of Financial Sector Supervisors: Principles and Practice,” in European Business Law Review,” Vol. 16, No. 6 (2005), pp. 1575–1620.

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