Preparing for the Next Financial Crisis

Institutions 299

In particular, independence plays only a limited role in preventing capture

through, for example, the freedom to determine sta salaries. From the point of

view of the profession, it is even more desirable to capture a supervisor if he or

she is more independent. Instead, accountability is essential to avoid capture, in-

cluding “self- capture”, which would allow the supervisor to pursue bureaucratic

objectives (Levine, 2011). It thus plays a complementary role to independence.

Quintyn etal. (2007) identify seven dimensions of accountability:

– Mandate: The institution’s mandate is dened by the law. As noted above, this

is rarely the case for central banks (Oosterloo and de Haan, 2004; BIS, 2011).

– Accountability to t ...