Central bank governance and financial stability

"The recent financial crisis has raised a number of important questions concerning the role of the central bank in the prevention, management and resolution of financial crises. As the crisis unfolded, a number of central banks were confronted with unusually challenging circumstances, which required a sharp expansion in the use of traditional intervention tools and the introduction of entirely new ones. At the same time, the public debate about the appropriate role of central banks in the financial stability arena and their relationship with other relevant bodies intensified. The Central Bank Governance Group recognized that such events were likely to lead to a reconsideration of the mandates of central banks in the area of financial stability and commissioned a Study Group to evaluate the specific governance implications of such a reconsideration. The resulting report explores the implications of the crisis for the financial stability mandates of central banks. This includes looking at the implications for autonomy and governance of allocating macroprudential responsibilities to central banks and changing their capacity to provide support to the financial system. A particular focus is the governance arrangements needed for the effective and sustainable conduct of core monetary policy functions in combination with the addition of an explicit mandate to contribute to the stability of the financial system"--Pref.