Legal Protection: Liability and Immunity Arrangements of Central Banks and Financial Supervisors
IMF Working Papers, August 2, 2018
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- Legal Protection: Liability and Immunity Arrangements of Central Banks and Financial Supervisors
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Bibliographic details
- Authors: Ashraf Khan
- Published: August 2, 2018
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484372272.001
Core argument and conclusions
- Central bank legal protection contributes to safeguarding a central bank and its financial supervisor’s independence, especially for conducting monetary and financial stability policy.
- Legal protection for central banks and financial supervisors also entails enhanced accountability.
- The paper introduces the concepts of “appropriate legal protection” and “function-specific legal protection” as topics for further research.
Scope, data sources, and coverage
- Focus: legal protection for central banks and financial supervisors (when the supervisor is part of the central bank), with emphasis on liability, immunity, and indemnification arrangements.
- Databases and inputs:
- IMF’s Central Bank Legislation Database.
- IMF’s Article IV and FSAP Database.
- IMF MCM’s Technical Assistance Database.
- Method: selected overview and illustrative listing of selected country cases.
- Publication class: IMF Working Papers.
Key findings and analytical emphasis
- Emphasizes the trade-off between legal protection (supporting independence) and the requirement for enhanced accountability mechanisms.
- Analytical focus on three legal protection arrangements:
- liability;
- immunity;
- indemnification.
- Highlights the need to define and operationalize:
- “appropriate legal protection”; and
- “function-specific legal protection”.
Policy implications and research directions
- Strengthen accountability frameworks alongside any legal protection measures to preserve central bank and supervisor independence while ensuring responsibility.
- Further research recommended on:
- defining “appropriate legal protection” in practice;
- clarifying “function-specific legal protection” across monetary and financial stability functions;
- comparative country analyses drawing on central bank legislation and IMF assessment databases.