The Czech Republic promulgated new central bank legislation in 1993, making

the already strong Czech Central Bank even more legally independent.

Legislation charges the central bank with the sole goal of price stability, grants

complete autonomy in monetary policy formulation and a formal advisory role in

government budget policy and prohibits the bank from lending the government

more than 5 percent of the previous year’s government revenues and from

extending credit with more than a three-month maturity. The central bank

governor and board are subject to presidential recall only if criminally sentenced

or incapacitated. The governor’s term is six years, exceeding the terms of office

of the nation’s president and lower house representatives.