Upon completion of this program, participants will be able to:

• Analyze the legal framework and constitutional basis for central bank existence and mandate.
• Evaluate the structural, goal, and instrument dimensions of **central bank independence (CBI)**.
• Describe the optimal governance structure for the central bank's decision-making bodies (e.g., board, committees).
• Understand the legal authority and limitations for key functions (e.g., ELA, financial supervision, currency issuance).
• Design a comprehensive **accountability framework** (e.g., reporting, hearings, policy explanations).
• Assess the legal risks related to central bank balance sheet activities (e.g., QE, foreign exchange operations).
• Examine the role of internal and external audit in central bank transparency and compliance.
• Formulate legal and governance reforms to strengthen institutional credibility and public trust.

• Central Bank General Counsel and Legal Department Staff
• Board Members and Senior Management
• Government Officials overseeing Central Bank relations
• Policy Analysts and Economists interested in Institutional Design
• Internal Audit and Compliance Professionals
• Academics and Researchers in Public Law and Finance

Legal case studies on central bank authority, Group project on drafting an accountability charter, Role-playing policy committee meetings, Policy debates on central bank independence and unconventional policy, Workshops on conflict of interest management, Structured discussions on legislative reform.

Unit 1: Legal Foundations and Independence

• The legal origins of the central bank and the constitutional/statutory definition of its mandate.
• Defining the primary objectives (e.g., price stability, financial stability) and secondary objectives.
• The concept of ultra vires and the limits of central bank legal authority.
• Analysis of the relationship between the central bank and the government/treasury.

• Dimensions of CBI: goal independence, instrument independence, and structural independence.
• Measures to protect CBI: tenure of the governor, financial autonomy, and legal protection.
• Empirical evidence on the relationship between CBI and economic performance (e.g., inflation).
• Challenges to CBI: political pressure, unconventional policies, and public criticism.

Unit 2: Governance and Decision-Making

• Optimal design of the central bank's governing body (e.g., single board, two-tier system).
• Role, composition, and skill requirements for policy committee members.
• Procedures for policy decision-making, voting, and meeting documentation.
• Managing conflicts of interest and ethical standards for central bank officials.

• Legal basis for Open Market Operations and the use of the central bank balance sheet.
• The legal framework for **Emergency Liquidity Assistance (ELA)** and its conditions.
• Legal authority for payment system oversight and FMI regulation.
• Legal implications of Central Bank Digital Currency (CBDC) issuance.

Unit 3: Accountability and Transparency

• Defining accountability and the trade-off with independence.
• Mechanisms: regular reports, testimony before legislative committees, and external reviews.
• The policy explanation framework (e.g., explaining deviations from the inflation target).
• Communication policies regarding transparency of forecasts, minutes, and votes.

• The role of internal audit in assessing governance, risk management, and controls.
• External audit requirements and the legal status of the central bank's financial accounts.
• Legal risks associated with unconventional policy tools (e.g., fiscal dominance, potential losses).
• Litigation risk: legal challenges to central bank decisions and actions.

Unit 4: Reform and Comparative Analysis

• Post-crisis trends towards clearer mandates for financial stability and macroprudential policy.
• Legal reforms to strengthen the resolution authority and banking supervision.
• Comparative analysis of the legal and governance structures of major central banks (e.g., Fed, ECB, BoJ).
• The process of legal reform and institutional change in central banking.