Topical Issues

The debate in relation to financial stability is fast moving. A year ago the macroprudential component was centre stage: today other issues have come to the fore. The following is a selection of issues currently exercising our clients.  We would welcome any comments or reflections! 

  • How should different financial stability responsibilities be allocated across central banks, supervisors, ministries of finance and other authorities? To what extent can or should politics be kept out of decision making? 
  • How separate should monetary policy be kept from financial stability policy?  Are there risks that making central banks accountable for financial stability might threaten the traditional independence of monetary policy setting?
  • How should conflicts that emerge among different sets of policy (financial stability, growth, price stability, competition, etc) be resolved?
  • Should macroprudential policy stick to the task of mitigating the danger of crises? Or should it also be used to encourage growth?
  • How do structural reforms [Volcker, Vickers, Liikanen] contribute to financial stability objectives?
  • How can the set of actions (early intervention, crisis triggers, crisis handling, resolution and recovery) needed as crisis unfolds best be joined up?