Ojo, Marianne (2009): Central bank’s role and involvement in bank regulation: Lender of last resort arrangements and the Special Resolution Regime (SRR). Published in: Designing Optimal Models of Financial Regulation in a Changing Financial Environment No. ISBN: 978-163484-829-9 (February 2016)
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Abstract
This paper considers developments which have necessitated greater involvement and a greater role for the central bank in financial regulation and supervision. The aftermath of the 2007/08 financial crisis has witnessed the enactment of legislation such as the Banking Act of 2009 which has not only introduced greater statutory powers for the central bank, but also the Special Resolution Regime. As well as a consideration of arguments which are in favour of the central bank’s role as supervisor and lender of last resort, the importance of central bank independence and safeguards which exist to ensure that sufficient accountability is fostered, will be considered. Safeguards and accountability mechanisms which are adequate, such that, whilst ensuring that the regulator is not susceptible to regulatory capture, do not impede the ability of such a regulator to obtain vital and necessary information from systemically important individual financial institutions. In its support of the view that central banks should assume a greater role in supervision, this paper not only seeks to justify why such a degree of involvement is vital to ensuring and maintaining stability in the financial system, but also those factors which are considered to be necessary if such a role is to be effective.
Item Type: | MPRA Paper |
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Original Title: | Central bank’s role and involvement in bank regulation: Lender of last resort arrangements and the Special Resolution Regime (SRR) |
Language: | English |
Keywords: | central; bank; lender; last; resort;regulation;monetary;policy |
Subjects: | K - Law and Economics > K2 - Regulation and Business Law E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies |
Item ID: | 69298 |
Depositing User: | Dr Marianne Ojo |
Date Deposited: | 08 Feb 2016 15:33 |
Last Modified: | 10 Oct 2019 12:59 |
References: | F Amtenbrink, ‘Securing Financial Independence in the Legal Basis of a Central Bank’ at page 6 W Buiter, Central Banks and Financial Crises (Paper presented at the Federal Reserve Bank of Kansas City’s symposium on “Maintaining Stability in a Changing Financial System”, at Jackson Hole, Wyoming, on August 21-23, 2008 K Guha ‚ Fed Moves To Minimise Systemic Risk’ The Financial Times March 14 2008 De Larosière, 2009, “Report of the High-level Group on Financial Supervision in the EU,” Brussels, Feb 25, 2009 Deutsche Bundesbank, ‘Deutsche Bundesbank's Involvement in Banking Supervision’ Monthly Report (September 2000) p 34 J González-Páramo, ‘Managing risk: The role of the central bank in a financial crisis’ Speech given at Risk Europe 2009 Frankfurt am Main, 4 June 2009 C Goodhart and D Schoenmaker ' Institutional Separation Between Supervisory and Monetary Agencies ' (Financial Markets Group Special Papers 1992 )140-141; CAE Goodhart The Emerging Framework of Financial Regulation (1998) 249 C Hadjiemanuil, Banking Regulation and the Bank of England 1995 Lloyds of London Press at page 182 EHGHüpkes, M Quintyn, M Taylor, ‘The Accountability of Financial Sector Supervisors: Theory and Practice 2006 at page 1 HM Treasury, Bank of England and FSA, 2008, “Financial Stability and Depositor Protection: Further Consultation,” July 2008. RM Lastra, Legal Foundations of International Financial Stability 2006 45-46 J Lawson and S Barnes and Marte Sollie ‘Financial Market Stability in the European Union: Enhancing Regulation and Supervision’ Economics Department Working Paper No. 670 page 37 J Muellbauer, ‘The Folly of the Central Banks of Europe’ October 2008 W Nier, ‘Financial Stability Frameworks and the Role of Central Banks: Lessons from the Crisis’ IMF Working Paper WP/09/70 April 2009 at pages 21 and 22 C Reinhart and A Felton, ‘The First Global Financial Crisis of the 21st Century: Part II, June – December 2008 < http://mpra.ub.uni-muenchen.de/13604> at page 5 D Schoenmaker and S Oosterloo, “Financial Supervision in Europe: A Proposal for a New Architecture”, in: L. Jonung, C. Walkner and M. Watson (eds), Building the Financial Foundations of the Euro - Experiences and Challenges, 2008 Routledge, London LB Smaghi, ‘Central Bank Independence in the EU: From Theory to Practice’ European Law Journal, Vol. 14, No. 4, July 2008, p454 R Smits, ‘European Central bank Institutional Aspects’ 1997 Kluwer Law International at page 157 P Stella and A Lönnberg, ‚Issues in Central Bank Finance and Independence’ IMF Working Paper WP/08/37 and in particular, the European Monetary Institute’s report EMI (1998) “Convergence report” at page 295 Treasury and Civil Service Committee, Sixth Report: “The Regulation of Financial Services in the UK” House of Commons, (1994-1995) 332 para 108 http://www.bankofengland.co.uk/publications/news/2009/048.htm http://www.bundesbank.de/bankenaufsicht/bankenaufsicht_bafin.en.php http://www.ecb.int/press/key/date/2009/html/sp090604.en.html http://www.fsa.gov.uk/pubs/mou/fsa_hmt_boe.pdf> http://www.hm-treasury.gov.uk/fin_banking_act2009.htm http://www.spiegel.de/international/business/0,1518,536635,00.html http://www.voxeu.org/index.php?q=node/1263 |
URI: | https://mpra.ub.uni-muenchen.de/id/eprint/69298 |
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Central bank’s role and involvement in bank regulation: Lender of last resort arrangements and the Special Resolution Regime (SRR). (deposited 17 Jun 2009 00:55)
- Central bank’s role and involvement in bank regulation: Lender of last resort arrangements and the Special Resolution Regime (SRR). (deposited 08 Feb 2016 15:33) [Currently Displayed]
- Central bank’s role and involvement in bank regulation: Lender of last resort arrangements and the Special Resolution Regime (SRR). (deposited 08 Feb 2016 15:10)