Under present law, the president names the governor of the Central Bank and can replace him any time the president wishes. The president also serves as the chair of the governing board of the Central Bank.
Last month, the Majlis approved legislation to remove the president entirely from the governing board, though he would still name the governor. The legislation also provided for several professional economists to be named to the governing board to add some professional leavening.
The 12-man Council of Guardians declared the legislation to violate the constitution, saying the governing board could not include non-government people, like the economists.
The Majlis went back to the drawing board after that and started all over again. Many critics had complained that removing the president from the board went too far while others said it didn’t go far enough because the president could still name and fire the governor.
The Majlis came up with an entirely new approach. It dropped the economists from the board, allowed the president to stay on the board, but said the Majlis would have to approve the president’s nominee for governor of the Central Bank.
The Council of Guardians swiftly reviewed that legislation and promptly vetoed it as unconstitutional. The Guardians said the Majlis cannot insert itself in approving individual nominees for governor. The spokesman for the Council said the 12 Guardians had also found 10 other problems with the legislation.
It isn’t known what the Majlis will do now.
In the United States, the president nominates the chair of the Federal Reserve Board, which is the central bank. The Senate must approve the nomination. But the chairman of the Federal Reserve is named for a fixed four-year term and cannot be fired by the president.