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Financial Stability Frameworks and the Role of Central Banks :, Lessons From the Crisis, Erlend Nier

This paper sets out general principles for the design of financial stability frameworks, starting from an analysis of the objectives and tools of financial regulation. The paper then offers a comprehensive analysis of the costs and benefits of the two main models that have emerged for modern financial systems: the integrated model, with a single supervisor outside of the central bank, and the twin-peaks model, with a systemic risk regulator (central bank) on the one hand and a conduct of business regulator on the other. The paper concludes that the twin-peaks model may become more attractive when regulatory structures are geared more explicitly towards the mitigation of systemic risk-including through the introduction of new macroprudential tools that could be used alongside monetary policy to contain macro-systemic risks; through enhanced regulation and special resolution regimes for systemically important institutions; and a more holistic approach to the oversight of clearing and settlement systems. Since the optimal solution may well be path-dependent and specific to the development of financial markets in any given country, a number of hybrid models are also discussed
Table Of Contents
Contents; Executive Summary; I. The Role of Central Banks in Financial Stability-Lessons from the Crisis; A. Monetary Policy; B. Provision of Systemic Liquidity; C. Lender of Last Resort and Resolution of Failing Institutions; D. Oversight of Payment and Settlement Systems; II. Costs and Benefits of a Role of Central Banks in Financial Regulation; III. Recent Debates on Financial Stability Frameworks; IV. Financial Regulation-Objectives, Tools, Scope; A. Why Regulate Financial Institutions?; B. How to Regulate Financial Institutions?; C. Who Should be Regulated?; Boxes
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (66 p.)
Specific Material Designation
Form Of Item

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