Central banks' financial independence crucial for monetary policy credibility.
The article discusses how the financial strength and independence of central banks are crucial for their credibility in setting monetary policy. It explores the idea that central banks can be constrained in achieving their goals by their own financial situation. The researchers found that not all central banks have strong financial backing from their governments, which can lead to challenges in meeting policy objectives. This highlights the importance of ensuring central banks have the necessary financial independence to carry out their functions effectively.