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A Survey of Institutional Frameworks for Financial Stability

Author

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  • Sander Oosterloo
  • Jakob de Haan

Abstract

The aim of this study is to get a better understanding of which financial stability responsibilities have been delegated to central banks (CBs), how these responsibilities are executed, and whether accountability arrangements are in place. For this purpose, a questionnaire was sent to all CBs in the OECD area. We find that there is no unambiguous definition of financial stability or systemic risk, and that, generally, the responsibility for financial stability is not explicitly formulated in laws. However, there seems to be a gradual trend towards clarifying the powers and functions of the CB. Moreover, there is considerable heterogeneity in the way CBs pursue the financial stability objective. Our results suggest that the accountability of the financial stability function of central banks is often poorly arranged.

Suggested Citation

  • Sander Oosterloo & Jakob de Haan, 2003. "A Survey of Institutional Frameworks for Financial Stability," DNB Occasional Studies 104, Netherlands Central Bank, Research Department.
  • Handle: RePEc:dnb:dnbocs:104
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    File URL: https://www.dnb.nl/en/binaries/os_4_tcm47-146640.pdf
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    References listed on IDEAS

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    1. Marc Quintyn & Michael W. Taylor, 2003. "Regulatory and Supervisory Independence and Financial Stability," CESifo Economic Studies, CESifo, vol. 49(2), pages 259-294.
    2. De Bandt, Olivier & Hartmann, Philipp, 2000. "Systemic risk: A survey," Working Paper Series 0035, European Central Bank.
    3. Goodhart, Charles & Schoenmaker, Dirk, 1995. "Should the Functions of Monetary Policy and Banking Supervision Be Separated?," Oxford Economic Papers, Oxford University Press, vol. 47(4), pages 539-560, October.
    4. Jakob de Haan & Sylvester C.W. Eijffinger, 2000. "The Democratic Accountability of the European Central Bank: A Comment on Two Fairy-tales," Journal of Common Market Studies, Wiley Blackwell, vol. 38(3), pages 393-407, September.
    5. Charles Goodhart, 1999. "Myths About the Lender of Last Resort," FMG Special Papers sp120, Financial Markets Group.
    6. Charles Goodhart, 2000. "The Organisational Structure of Banking Supervision," FMG Special Papers sp127, Financial Markets Group.
    7. Eijffinger, Sylvester & Haan, Jakob de, 2000. "European Monetary and Fiscal Policy," OUP Catalogue, Oxford University Press, number 9780198776161.
    8. Hoggarth, Glenn & Reis, Ricardo & Saporta, Victoria, 2002. "Costs of banking system instability: Some empirical evidence," Journal of Banking & Finance, Elsevier, vol. 26(5), pages 825-855, May.
    9. Edward J Frydl & Marc G Quintyn, 2000. "The Benefits and Costs of Intervening in Banking Crises," IMF Working Papers 00/147, International Monetary Fund.
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    Citations

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    Cited by:

    1. repec:eee:finsta:v:29:y:2017:i:c:p:92-105 is not listed on IDEAS
    2. Masciandaro, Donato, 2007. "Divide et impera: Financial supervision unification and central bank fragmentation effect," European Journal of Political Economy, Elsevier, vol. 23(2), pages 285-315, June.
    3. Michael W Taylor & Marc G Quintyn & Eva H. G. H├╝pkes, 2005. "The Accountability of Financial Sector Supervisors; Principles and Practice," IMF Working Papers 05/51, International Monetary Fund.
    4. Martin Cihak, 2006. "How Do Central Banks Writeon Financial Stability?," IMF Working Papers 06/163, International Monetary Fund.
    5. repec:clh:resear:v:8:y:2015:i:34 is not listed on IDEAS
    6. Donato Masciandaro, 2012. "Determinants of Financial Supervision Regimes: Markets, Institutions, Politics, Law or Geography?," Chapters,in: Research Handbook on International Financial Regulation, chapter 14 Edward Elgar Publishing.

    More about this item

    Keywords

    financial stability; accountability;

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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