Greater accountability of central bank governers and directors needs to be established in order to promote policy effectiveness and confidence in central banks.
Central banks should set clear policy targets. If economic variables deviate from these targets people in charge of central banks should be made accountable before bodies that have power to fire/punish individuals which do not adhere to their mandate. Incentives should also be put in place for achieving targets. One posibility is establishing a parliamentary/congressional committee with powers to call upon central bank executives to explain why they are straying from targets. If objectives aren’t being met the committe should have the power to fire executives. For example if the monetary authority is undershooting its inflation target governers who are most hawkish can be brought before the committee to explain their actions and if deemed innapropriate then these executives can be fired and a public vote for new executives can be establised to replace the fried executives. Limits on how many governers of the board can be replaced per year can be imposed in order to limit uncertainty.