Bank of France Governor Francois Villeroy de Galhau told an audience at the International Monetary Fund and World Bank spring meetings in Washington that central bank independence is a prerequisite for successful monetary policy.
"I know it’s criticized. It’s under attack, including sometimes in this country," Villeroy said during the event, stressing that independence was established as part of democratic institutions rather than by central bankers themselves. He argued that the arrangement serves both economies and societies because "the practical experience is that independence brings lower inflation and lower interest rates."
Villeroy added: "So I hope we can stick with that everywhere. It will help through this crisis." His remarks came amid heightened concerns among U.S. allies about recent challenges to the Federal Reserve and its leadership.
The comments reflect growing unease over repeated attacks on current Fed Chair Jerome Powell, including criticism from former President Donald Trump that Powell was slow to cut U.S. interest rates. Separate from his role as chair, Powell also holds a seat on the Federal Reserve’s Board of Governors; Trump on Wednesday threatened to remove him from that Board seat if Powell does not vacate it when his term as chair ends on May 15.
There is also a criminal investigation into the renovation of the Fed’s headquarters in Washington, a matter that has added to the scrutiny surrounding the central bank. Against this backdrop, the prospect of a smooth and timely handover to Trump’s preferred candidate for Fed chair, Kevin Warsh, is increasingly uncertain. That situation raises the possibility of a clash over who directs central bank operations in the interval if a clear transition does not occur.
Villeroy framed central bank autonomy as a democratic safeguard that benefits macroeconomic outcomes. His statements link institutional design to measurable policy aims by noting the association between independence and "lower inflation and lower interest rates." He urged defenders of that model to maintain it globally, citing its utility "through this crisis."
Observers in allied countries have taken note of the sequence of political and legal pressures surrounding the U.S. central bank, viewing them as relevant to the broader principle Villeroy defended at the Washington meeting.