FSP opposes move to make Central Bank of Sri Lanka independent of Parliament

The Frontline Socialist Party says that the Central Bank of Sri Lanka Bill, if passed, would enable President Ranil Wickremesinghe to come to Parliament one day and state that there had been no Central Bank robbery for there had been no Central Bank to be robbed.

Addressing the media at the party headquarters, in Nuegegoda, FSP Educational Secretary, Pubudu Jagoda, said that the new legislation would deprive Parliament of power over the Central Bank. “This Bill contains provisions to do away with the Parliament’s powers of controlling the Central Bank. Parliament has the supreme control over public finance. It will hand the Central Bank’s autonomy to a few officials,” Jagoda said. “This Bill contains nothing but realisation of the general concept of an Independent Central Bank (ICB) promoted across the world by neo-classical economists and institutions such as the IMF. ICBs are fundamentally antithetical to democracy. The Parliament of elected representatives will lose their power to stop if an ICB oversteps its regulations. Parliament cannot make an ICB accountable. This has been tried and failed in many parts of the world. What happened in Latvia recently exemplifies ICB well. The Latvian Central Bank Governor was accused of bribery and money laundering. The Latvian Parliament voted 55 to 0 against him. However, when he was barred, the European Union stated that it was against the EU law because the Latvian Central Bank was an ‘independent’ institution.

Jagoda said that the US Parliament had been able to nothing when the Federal Reserve bank took away 4.7 trillion dollars from public funds meant for people’s welfare and deposited them in bank accounts of the super-rich.

“Years ago, all the countries had national central banks. It was noticed that there were a hindrance to the global money circulation because the banks were guided by the interests of their countries. Then came a concept proposing to make these banks independent. This independence is given by removing all the rights of the electives of people to intervene in the central bank. The new law will rescind Parliament’s power to appoint top officials of the Central Bank. As of now, Parliament can summon Central Bank officials and question them. This would not be possible if the Central Bank of Sri Lanka Bill is passed. This would surely end the Central Bank’s national role. After the bank is done away with, President Ranil Wickremesinghe could come to Parliament and state that he did not rob the Central bank as there was no Central Bank to be robbed,” Jagoda said.