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In Argentina, the central bank, which under its constituent law of 1935 had enjoyed complete independence for the exercise of its functions, passed in 1949 under the direct control of the Ministry of Finance. It is now governed by a directorate composed of the Minister of Finance, acting as President of the bank, the Under Secretary of the Finance Ministry, and nine directors who are either the presidents of nationalized commercial, industrial, mortgage, or savings banks, or are government appointees representing agriculture, stockbreeding, commerce, and labor.

In a few countries the formulation of monetary and credit policy is entrusted to a national council that includes, among others, both the minister of finance and the governor of the central bank. In France the National Credit Council was established in 1945 by the same law that nationalized the central bank and the four largest commercial banks. It is presided over by the Minister of Finance, with the Governor of the Bank of France acting as vice president ex-officio. In addition, there are 38 members representing various government departments, public and private financial institutions, business, agriculture, labor, and the consumer. The Council's functions are purely advisory; nevertheless, it seems to have exercised a considerable influence in the formulation of French monetary and credit policy.

In Italy, on the other hand, the Inter-ministerial Credit Committee set up in 1947 has full authority to determine policy. It consists of the Minister of the Treasury, as chairman, and of the Ministers of Finance, Agriculture, Industry, and Foreign Trade. The Governor of the Bank of Italy, although not a formal member, attends the sessions of the Committee. The role of the Bank is somewhat greater than the composition of the Committee would suggest since the Bank is charged not only with technical responsibility for carrying out the broad decisions of the Committee, but also with presenting to the Committee reports and studies of those problems which are within the group's competence. The Committee's responsibilities cover not only broad problems of monetary policy but also purely banking matters. 4. Conclusion

This review of relationships between the executive and the central bank in foreign countries suggests that the ultimate responsibility for determining over-all economic policies has increasingly been granted to public officials who are politically responsible to the electorate. Except in countries where more or less complete power to direct all aspects of the economy has been concentrated in government hands, the tendency appears to be to leave with the central bank a definite measure of responsibility for influencing monetary conditions within the broad framework of economic policy determined by the government as a whole.

In the attempt to establish a smoothly functioning relationship between the central bank and the financial officers of the government, legislation of considerable variety has been devised. This legislation has depended upon varying concepts of the relationship appropriate to particular national conditions, as such concepts have developed in countries in different stages of economic growth and with various social and political backgrounds.

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EXHIBIT B.-Capital and ownership of foreign central banks

[In thousands of currency units]

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EXHIBIT B.-Capital and ownership of foreign central banks-Continued

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1 Probable distribution only. The law, however, provides that the Government is to subscribe to at least 75 percent of the shares and has preference in purchasing the remaining
25 percent.
2 Half of the shares are owned by the French Government, 3 by the Algerian Government, and 6 by the Tunisian Government.
3 No complete balance sheet has been issued since the war; amount of capitalization not available.

4 Since the bank is currently in the process of being organized, the amount of capital paid up is not known at this time. By June 1952, however, it will be all subscribed in the
manner shown. Of the government-owned shares, 75,000 are owned by the Congo Government and 15,000 by the Vice Government of Ruanda-Urundi. The bank-owned shares are
owned by the National Bank of Belgium.

5 This is not a central bank, but through its administration of the Government's Rediscount Department and its handling of the Government's deposits, it has fulfilled certain
central bank functions. Moreover, it acts as fiscal agent for the Government abroad.

6 Art. 11 of the bank law of Dec. 23, 1947, provides that "The capital of the Bulgarian National Bank is unlimited. The bank can create, on the decision of the Council of Minis-
ters funds according to its needs." We have no further information.
7 The Central Bank of China was transferred in 1949 to Formosa, where it now functions as a central bank. It is custodian of the island's gold, and is administrator of all foreign
exchange funds. However, it does not issue currency, this function having been assumed by the Bank of Taiwan, a provincial bank.
8 Organized in 1949 as a wholly Government-owned bank. No further details available.

9 The power of increasing the authorized capital from the original 10 million pesos to provide shares for new or old member banks has apparently been used.
10 Owned and controlled by persons and institutions in France.

11 The capital of the Bank Deutscher Laender is owned by the land central banks, the capital of which, in turn, is owned by the respective land governments.

12 55 million of bank's capital is owned by the Finance and other Ministries of the central Government: 45 million by the various state banks, which are owned by the state gov

13 The "state" and "state undertakings" are authorized to hold up to 10 of total capital, but no information is available to indicate that the government holds any shares.
14 Art. 8-10 of the new central bank law states that "the bank shall be established with an initial guarantee fund of 500,000 quetzales, which shall be contributed by the state."
This guarantee fund is to be augmented by the annual net profits "until this fund reaches a sum equivalent to 10 percent of the total assets of the bank, provided that this percentage
exceeds 500,000 quetzales." For this calculation, international reserves are to be subtracted from total assets.

15 As of January 1946. A new currency unit, the "forint", was introduced in August 1946 to replace the pengo, but no data are available as to the bank's capitalization under the
new currency. The 1948 bank law provided for capital of "30 million gold crowns"; on Dec. 31, 1949, the bank's statement indicated that 30 million gold crowns were valued at
"120,823,162 florins." Some shares apparently can be privately owned.

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19 Majority ownership by Government is specified by banking law, but exact proportion is not known.

20 Total paid-up capital as of September 1950. Paid-up capital is eventually to be raised to 111,000, the French Government owning a clear but unspecified majority. 21 Obligatory government ownership of 51 percent of capital. About 3 of privately owned capital is held by banks controlled or partially owned by Government. Most of remaining privately held shares are in hands of other banks.

22 As of November 1945, French and Moroccan banks reportedly held 57 percent of the bank's capital stock. The balance was probably all held by banks in other countries. 23 No shares issued. A "general reserve fund" provided by the Government constitutes the capital.

24 Initial capitalization of 6,000,000 guaranies has been subject to periodic increases of unreported amounts by transfers from surplus funds of bank. Amounts shown are approximate only.

23 The banking reform of Oct. 25, 1948, and amendments to it in March 1951 do not mention the capitalization of the bank. On Oct. 28, 1950, a monetary reform revalued most old accounts at the rate of 100 old zlotys to 3 new zlotys. It is not known if, or how, this affected the Government's capital. 26 Bearer shares, amounting to 47,696,000 escudos, are regarded as being owned by "other."

27 Cantons and cantonal banks together own 54.8 percent of the shares. ("Government" comprises cantons and demicantons only. "Banks" comprise cantonal banks only. Other banks, the extent of whose holdings is not known, are included under "Other.") 28 State may hold no more than 25 percent of shares, and foreign banks may hold no more than 10 percent.

29 Capital appears to have been raised (perhaps several times) since 1933. The 1937 capital and reserves were nearly 2.9 billion rubles.

30 Government must hold minimum of 50 percent of the shares. Remaining 50 percent may be subscribed to by banks and public. After a certain date unsubscribed part must be taken up by Government. It is probable that the paid-up capital is entirely Government-owned. 31 No information.

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