Back to the Future?

The article analyzes the changing face of central banks as prudential supervisors before and after the 2008–2010 crisis. By the early 2000s an increasing numbers of countries had adopted a well-defined central banking framework, characterized by two intertwined features: the central bank becoming increasingly specialized in achieving monetary policy goals, while its traditional responsibilities for financial stability seemed to have become progressively less important. The involvement of central banks in supervision generally decreased; thus the separation view seemed to dominate. But then, since the onset of the 2008–2010 crisis, a number of relevant reforms have been undertaken to increase role of central banks in the field of prudential supervision, thus giving the upper hand to the integration view. The article describes the state of the art in order to discuss whether we are actually witnessing a sort of back to the future in the allocation of central banking and banking supervisory powers. The main result is that central banking and prudential supervision are now moving closer again, but with the introduction of the new distinction between macro- and microsupervision. Therefore new perspectives have opened in the trade-off between separation and integration, raising the possibility that the model of the central bank being specialized in monetary policy can be consistent with enlarged responsibilities in the macro-prudential area.