Some New Directions for Financial Stability?

September 30, 2004

Preview Citation

Format: Chicago

Some New Directions for Financial Stability?, (USA: International Monetary Fund, 2004) accessed November 21, 2024

Summary

This paper presents the functional responsibilities of a central bank which is required to maintain systemic financial stability without having supervisory oversight of individual financial institutions. Although the Financial Services Authority (FSA) has responsibility for supervising individual financial institutions, the central bank retains responsibility for the smooth running of the domestic payments system and, by extension, oversight of the structure and soundness of the clearing and settlement systems of the main financial markets, money and bond markets, the foreign exchange market, and the equity market. A second, associated function, thrown into prominence by 9/11, is to undertake contingency planning against a major physical disruption of markets, whether by terrorism or natural causes. A third role, perhaps the best-known component in this portfolio of operational tasks, is to provide injections of liquidity, either to the financial system as a whole via open market operations or via lender-of-last-resort (LOLR) actions to individual institutions. A problem with such latter LOLR operations is that they might put taxpayers’ money at risk.

Subject: Asset and liability management, Banking, Commercial banks, Financial crises, Financial institutions, Financial regulation and supervision, Financial sector policy and analysis, Financial sector stability, Liquidity indicators, Liquidity management, Liquidity risk

Keywords: Capital value, Commercial banks, Eastern Europe, Europe, Fair value accounting, Financial sector stability, Global, Iron Curtain speech, Liquidity management, Liquidity risk, MISC PUBS, Misc., Monetary policy committee, Per Jacobsson Foundation lecture, Value

Publication Details

Pages:

44
Volume:

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DOI:

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Issue:

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Series:

per Jacobson lecture
Stock No:

PJIEA2004002
ISBN:

9781451980868
ISSN:

0252-3108

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