BOJ beseeches panel for more independence

Bank of Japan officials on Jan. 21 urged a study panel drawing up revisions to the BOJ Law to give the central bank more independence from the government than the panels’s deliberations are currently considering, according to the panel’s head.Ryuichiro Tachi, a professor emeritus at Tokyo University and chairman of the Finance Ministry’s Financial System Research Council, said representatives of the BOJ objected to the direction in which the revision process is proceeding. “Some council members said we should keep in mind that the BOJ is not a government agency but a bank, and therefore is a player in the financial market,” Tachi said when briefing reporters. There were also calls that global standards must also be considered when overhauling the BOJ Law, he said.A bill to comprehensively change the current BOJ Law, which has been untouched since its enactment in 1942, is to be submitted to the session by March to increase the central bank’s autonomy and policymaking transparency. Six meetings of a subcommittee debating the issue so far have basically resulted in agreement on such points as increasing the members of the BOJ Policy Board from six to nine, and having it meet twice a month.But critics, including the BOJ itself, point out that some of the proposed revisions are a far cry from reducing government — especially Finance Ministry — influence over the BOJ’s monetary policy and its general operations. At this point, the panel is leaning toward allowing the Finance Minister to retain supervisory powers over the BOJ’s general operations and to be able to authorize the bank’s budget.