asked the Minister for Finance how the Governor and members of the Central Bank are appointed; their remuneration; to whom they are answerable; and, in general, if he will state the measure of autonomy extended to that body.
24.
Ceisteanna—Questions. Oral Answers. - Central Bank.
23.
asked the Minister for Finance what control or consultation lies with him in respect of the Central Bank and in regard to quantity and nature of the bank's reserves, the nature of the bank's investments and general monetary policy and accountability.
With your permission, a Cheann Comhairle, I propose to take Questions Nos. 23 and 24 together.
In accordance with the provisions of the Central Bank Act, 1942, the Governor of the Central Bank is appointed by the President on the advice of the Government. His remuneration is determined by the board of the bank. The eight other members of the board are appointed by the Minister for Finance, three being from nominees of the associated banks and not more than two being from the Civil Service. Their remuneration—at present £750 a year—is fixed by the Minister.
Subject to the ultimate responsibility of the Government for national economic policy of which monetary policy is a part, the Central Bank is free, within the limits of the powers for the time being vested in it by law, in carrying out its statutory general function and duty of "safeguarding the integrity of the currency and ensuring that in what pertains to the control of credit the constant and predominant aim shall be the welfare of the people as a whole".
As Minister for Finance, I am authorised by the 1942 Act to request the Governor on behalf of the board, or the board, to consult and advise with me as regards the performance by the bank of this general function and duty and the board is obliged to comply with every such request. In practice there are frequent consultations between the Minister and the Governor covering matters mentioned by the Deputy all of which are aspects of the bank's general function and duty.
May I ask the Minister what is the meaning of the words "the integrity of the currency"?
I would have thought that would be clear enough to the Deputy.
Let me clarify it for the Minister. Would they be equivalent to "the purchasing power of the currency"? Would they be exactly the same?
If the Deputy means the maintenance of the value of the purchasing power of the currency at a constant value——
Yes, I do.
——in a world of rising prices and inflation, I would think the words could not mean that.
It all depends on what world you are talking about. The Swiss have been able to maintain their position down through the years and they were in much the same position as we were.
It is republican integrity he is talking about.
Would the Minister not agree that the integrity of the currency has been gravely affected by the Government crisis recently, that we have an economic crisis at present, and that the Government are fidding while Rome is burning, and doing nothing about it?
The answer to all the Deputy's imputations is "no".
It is Mount Street that is burning.
Would the Minister agree that, as a result of the last devaluation and by virtue of the fact that we had an excessive amount of our reserves in sterling, we lost £7 million or £8 million?
As a result of devaluation?
Yes.
I have not got the figure offhand but we did, of course, lose as a result of devaluation.
As the Minister has answered three questions together——
Two.
——could the Minister tell me arising out of a credit of £25 million in the books of the ordinary banks which the Government had last October, what effect that had on the integrity of the currency?
That would seem to be a separate question.