By P J N Sinclair, Director, Centre for Central Banking Studies.
Many central banks have seen a recent increase in their autonomy in monetary policy, and also a transfer of supervisory and regulatory responsibilities to other bodies. But the maintenance of financial stability is, and remains, a core function for all central banks. This paper presents details of 37 central banks’ functions and powers as they stood in March 2000. It goes on to discuss financial crises and the morbidity of banks, the trade-off between competition and safety in the financial system, the international dimension to financial crises, the many links between financial stability policy and monetary policy, and the nature of the work of those charged with safeguarding financial stability.