ABSTRACT
The ‘light’ requirements of European economic governance stipulated for Western Balkan economies and harmonisaton with requirements related to the legal independence of central banks within the European System of Central Banks (ESCB) have strengthened the de jure independence of central banks. This chapter briefly presents the main traits of the new approach to accession negotiations and the main channels and instruments through which the requirements for adhesion to the EU influence the role of central banks in candidate countries. Considering that EU conditionality is the most influential source of external pressure, the chapter examines how accession negotiations have strengthened the functional independence of the National Bank of Serbia in pursuing monetary and macroprudential policy, maintaining financial stability and contributing to economic reforms. The final section of the chapter attempts to evaluate the de jure independence of the National Bank of Serbia on the basis of the most common standards for measuring the determinants of institutional independence. In the absence of clear protocols on measuring the impact of informal factors, the transparency of inflation targeting (IT), as the most objective measure of the de facto independence of Serbia’s monetary authority, has confirmed the hypothesis that growing independence and transparency contribute to the greater anchoring of inflation expectations.
