Panel eyes Diet approval for BOJ board members

A study panel drafting revisions to the Bank of Japan Law basically agreed Jan. 28 that appointment of central bank policy board members should be approved by the Diet.A majority of the panel’s members said the three board members representing the BOJ — including its governor and deputy governor — should be subject to Diet approval. Under current regulations, the governor and the deputy are appointed by the Cabinet. Panel chief Ryuichiro Tachi, professor emeritus at Tokyo University, said the idea’s supporters agree that there should be no difference in how BOJ representatives and outside board members are approved.The panel, a subcommittee of the Financial System Research Council, an advisory body to the finance minister, is to write a report on BOJ Law revisions by early next month. The revisions will be the backbone of a bill to be introduced during the current Diet session.At the day’s meeting, the subcommittee also agreed that the revised law should clearly state the BOJ’s independence and transparency in policymaking, and that the central bank’s goal is to support the economy by keeping prices stable. At the same time, it agreed that close cooperation with the government is required in forming monetary policy. The panel also plans to abolish clauses in the current BOJ Law that allow the finance minister to decide the number of notes, the nation’s currency, that the BOJ can issue.Debate over the need for more autonomy for the BOJ arose after criticism that, under the current law, the government — especially the Finance Ministry — and lawmakers were able to influence the bank’s decision-making on such key issues as monetary policy. However, some critics point out that the law revisions being debated by the panel, which was assembled by the Finance Ministry, could still leave room for maneuvering by outside forces.