{"id":14213,"date":"2026-09-11T14:36:09","date_gmt":"2026-09-11T12:36:09","guid":{"rendered":"https:\/\/ceves.org.rs\/?p=14213"},"modified":"2026-09-11T14:36:35","modified_gmt":"2026-09-11T12:36:35","slug":"analysis-central-bank-independence-in-serbia-conduct-in-practice","status":"publish","type":"post","link":"https:\/\/ceves.org.rs\/en\/analysis-central-bank-independence-in-serbia-conduct-in-practice\/","title":{"rendered":"Report: Central Bank Independence in Serbia \u2013 Conduct in Practice"},"content":{"rendered":"\n
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Download the Report here<\/a><\/div>\n<\/div>\n\n\n\n

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Author: CEVES<\/p>\n\n\n\n

Central Bank Independence in Serbia \u2013 Conduct in Practice<\/h1>\n\n\n\n

1. A de facto<\/em> problem<\/a><\/h2>\n\n\n\n

Serbia\u2019s central bank is independent on paper, and the European Commission treats it as broadly compliant. Some regulatory guarantees could be strengthened, but the problem with NBS independence does not lie there; it lies in implementation. Over the past decade and a half, National Bank policy has too often followed the government\u2019s lead \u2013 and on occasion likely served particular private interests \u2013 rather than checked them.  The latter includes a likely breech of fundamental privacy protection ethics.<\/p>\n\n\n\n

Monetary policy in the narrow sense is independent, anchored to Serbia\u2019s IMF programme. The difficulty lies in personal and institutional independence, in the conduct of the supervisory function, and in the pattern of policy over time. This carries structural costs. The tight monetary framework maintained while accommodating key populist fiscal policy priorities damages Serbia\u2019s competitiveness over the long term, and this damage can only be expected to worsen. Also, apparent breaches of privacy tenets undermine the trust that is essential for the adequate operation of a private market economy. Three threads run through the record: the Bank has repeatedly eased policy in step with the government\u2019s needs, often though not only around elections; it has directed that easing toward household and housing credit while leaving business and SME credit largely untouched; it has bolstered its power to conduct unaccountable surveillance over confidential individual data; and in supervision it has approved decisions difficult to reconcile with rigorous source-of-funds and fit-and-proper checks, on occasion to the apparent benefit of particular private interests.<\/p>\n\n\n\n

<\/a>2. Personal independence<\/a><\/h2>\n\n\n\n

The Governor came to the Bank from the leadership of the governing party in 2012 and, unlike her predecessors, has made no attempt in conduct or in word to hold it apart from the government; her tenure has been one of open coordination. <\/p>\n\n\n\n

As is well-known, the current Governor, Jorgovanka Tabakovi\u0107, came to the Bank in 2012 from the leadership of the governing Serbian Progressive Party \u2014 a member of its Presidency and Executive Board \u2014 after the newly elected majority changed the law to bring the Bank\u2019s leadership under its control and the sitting Governor, Dejan \u0160o\u0161ki\u0107, resigned over it[1]<\/sup><\/a>. A party background need not by itself shape conduct in office. What has shaped this tenure is the Governor\u2019s choice not to establish the distance from the government that her predecessors maintained: before 2012 open disagreement between the Bank and the government was not unusual, but since then the relationship has been one of tight coordination[2]<\/sup><\/a>.<\/p>\n\n\n\n

Among her first steps in office was a sharp de facto centralisation of decision-making within the Bank. Staff turnover after her appointment was heavy, particularly among expert personnel.<\/p>\n\n\n\n

The Bank\u2019s own language matches its conduct. The Governor describes monetary and fiscal outcomes as the coordinated policies of the Government and the National Bank, carried out under the President\u2019s vision[3]<\/sup><\/a>, and has presented particular NBS measures as taken on the President\u2019s initiative[4]<\/sup><\/a>. The President, in turn, speaks of the Bank in the register of instruction: in mid-2025 he stated that lending rates would have to come down[5]<\/sup><\/a>, and the Bank set about delivering them. In reporting and in public perception, the relationship is widely treated as one of settled coordination.<\/p>\n\n\n\n

3. Functional independence<\/h2>\n\n\n\n

On monetary policy in the narrow sense the National Bank has acted competently: it runs an inflation-targeting regime anchored to Serbia\u2019s IMF programme, and its stance has been credited with returning inflation to target.<\/p>\n\n\n\n

The European Commission records that monetary policy \u201cremained relatively tight, which helped inflation return to the target band,\u201d and the IMF treats the framework as anchored to its programme[6]<\/sup><\/a>[7]<\/a>. This is the one dimension of independence that largely holds. What follows concerns the others.  However, even in the case of monetary policy we document accomodations to political interests of which the most eggregious is the use of informal pressure on banks to reduce lending rates, while maintaining the reference rate unchanged.    This is a notable example of the essentially parallel political management of the economy that we speak of in other documents.[8]<\/a><\/p>\n\n\n\n

<\/a>4. Institutional independence<\/a><\/h2>\n\n\n\n

Measured against the Fiscal Council, whose own independence is not in question, the National Bank has unduly accommodated the government\u2019s political interests, most visibly around Serbia\u2019s frequent elections.<\/p>\n\n\n\n

Against this background of broadly appropriate monetary policy, we undertook a systematic reading of the NBS\u2019s policy and public-communication record from 2020, testing the view that the Governor\u2019s political ties limit the Bank\u2019s institutional independence. The Fiscal Council serves as the independent benchmark, and the comparison reveals a systematic discrepancy.<\/p>\n\n\n\n

Across the electoral cycles of this period, and through the crisis-laden months since the student protests began in late 2024, the Fiscal Council cautioned against the government\u2019s populist policies while the Bank stayed silent or moved to accommodate. Against that pattern, we are aware of only one occasion on which the Governor publicly voiced disagreement with government policy: the 2020 privatisation of the country\u2019s largest state-owned bank, Komercijalna banka, which she opposed, favouring a continued state role[9]<\/sup><\/a>. The case rests on three strands: the accommodation of fiscal loosening around the electoral calendar; a policy mix that distributed credit space unevenly between households and SMEs; and the Bank\u2019s use of its own balance sheet to support named state enterprises.<\/p>\n\n\n\n

<\/a>4.1 Accommodation over the electoral cycle<\/a><\/h3>\n\n\n\n

In each recent electoral episode the government loosened fiscal policy, the Fiscal Council cautioned on the record, and the National Bank either stayed silent on the demand and inflation implications or moved to facilitate.<\/p>\n\n\n\n