Current Issues

The debate in relation to central bank activities including in the field of financial stability is fast moving. The following is a selection of issues currently exercising our clients. We 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?
• Just how independent should central banks be, in relation to which activities and mandates and why? Should they be independent of Government or within Government? How has the pandemic affected the balance?
• How separate should – or can – 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 areas 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 can the set of actions (early intervention, crisis triggers, crisis handling, resolution and recovery) needed as crisis unfolds best be joined up?
• What is the impact of digitalisation on the payments system?
• Should central banks keep their function as monopoly provider of money: should private stablecoins have a chance?
• What will central banks look like coming out of Covid?
• How should central banks contend with balance sheets that are far larger than the historical norm?