Abstract

The central bank is the main regulator on the monetary market and as this market is a monopoly held by state, the market cannot adjust on its own, being always influenced by monetary policies. The primary purpose of this study is to highlight the importance of having independent central banks. For doing so, some points will be detailed, starting with discussions about the monetary policies, political influence monetary policies, inflation and Cantillon effect, free market of money and the ethics of money issuing and eventually, the question of either the central bank must be independent in order to answer the last question, the Federal Reserve System in the United States of America will be analyzed. On the basis of this research the conclusion that can be drawn is that, central bank should be granted freedom in drawing and implementing the monetary policies is supported.