Ruth Richardson, former finance minister of New Zealand, encapsulates the dilemma as follows: If a government wishes to talk the trendy talk of “central bank independence,” then it also better be prepared to walk the walk. An independent central bank should do whatever is necessary to ensure price stability, whether any other branch of government likes it or not. The central bank’s job is not to stimulate growth, promote exports, tinker with exchange rates or create jobs; it is to guarantee price stability. However, putting your finance minister, a member of the ruling party, in charge of that objective clearly does not “walk the walk” of independence. Zedillo’s aloofness from those concerns does not help. In fact, when local journalists queried Zedillo on his choice, asking, “Why Ortiz?” the president shot back with a flippant “Why not?”
Mexico’s history of rampant currency instability underscores the need to enhance the quality of monetary policy, compatible with the central bank’s constitutional mandate to maintain price stability (officially targeted in the long‐term annual goal of 0–3 percent inflation). Francisco Gil Díaz, the former vice governor, would have been an excellent candidate, but the Zedillo administration deemed him “too independent,” too committed to doing the job his own way. Zedillo’s choice, therefore, generates high opportunity costs: a vacancy left at Finance, the loss of Gil Díaz as a strong and credible governor, and having to wait and see if Ortiz will protect the purchasing power of the currency. Is Ortiz willing to respect that mandate, regardless of whether doing so conflicts with the political interest of his close friend and former boss?