National Appointments to Multinational Monetary Policymaking : A Role Conflict?

Territorial appointees to an independent central bank (e.g. District Federal Reserve Banks' presidents members of FOMC, Governors of national central banks members of the ECB's Governing Council) are liable to confront a "role conflict" stemming from a duality of loyalties and allegiances - to the home regional territory to which they owe the appointment and to the central bank to which they are appointed. This essay examines the issue of two "principals" for a given "agent", within the framework of an implicit "common agency" model in European monetary policymaking. Implicit in this issue are home-specific monetary preferences - on account of local social and economic structures, political orientations, cultural factors, and other determinants - conflicting with the central bank's mandated objectives, its social and political environment, the constellation of institutions gravitating in its orbit, which shape a given mindset and culture to which the territorial appointee is also prone to conform