Central bank independence is an essential precondition for the successful and credible conduct of monetary policy and thus for the achievement of the central bank’s primary objective of price stability.
The independence of the Croatian National Bank is in accordance with Article 130 of the Treaty on European Union, which guarantees the independence of the national central banks of the European Union. There are several aspects of central bank independence: functional, institutional, personal and financial. Functional independence implies a clearly defined objective and autonomy in the choice of measures and instruments to achieve it. Institutional independence means that the central bank takes decisions independently of the influence of other institutions. Personal independence guarantees the protection of CNB officials from external pressures, excludes conflicts of interest and precisely defines the conditions for the appointment and removal from office of the Governor and other members of the CNB Council. Financial independence implies the possibility for the CNB to autonomously obtain funds for the purpose of executing its mandate, with the income and expense determined by the monetary policy stance.