Importance of understanding legal aspects of central banks: Case of appointment at Reserve Bank of New Zealand…

The role of economics and law especially in central banking is becoming an increasingly an important topic. But as economic students, we hardly study law and whatever little is mostly for contracts etc.

Given how central banks are basically a legal entity and what is broadly does is defined under law, there should be much more attention on central bank act, its governance and highly crucial appointment rules.  Things like appointment rules immediately raise the question of how and why central bank statutes differ across countries? The answers lie in political economy and other aspects which we just miss.

Croaking Cassandra blog has been writing on how the appointments of chief of New Zealand are not as per law. The crux of the matter is the currenct Gpvernor term is getting over and NZ is facing elections. The Government has decided to appoint an interim Governor and appoint a full-term one only after elections. But the central bank law does not allow this.

In its recent post, Cassandra again raises the issue:

Impact of Indira canteen: Darshinis increase quantity of rice-idli-sambar but Indira canteens rethinking on the composition..

Competition is important.

Did now know or notice that Bangalore Darshinis have increased their quantity of offerings following launch of Indira canteens:

GST blues: No GST on sitar, but tax string on guitar…

GST has led to gains for some and losses for some. It will take a while for things to settle down.

So, this bit is interesting. In a recent meeting, the GST council exempted the Sitar from taxes on account of being indigenous musical instrument. However, the foreign guitar saw no such luck. Same for indigenous dhol vs. foreign drums. Taxation is seen one of the reasons for innovations. So perhaps the time has come to make a guitar which looks like a sitar: