The modern central bank’s mandate and the discussion following the financial crisis

Date 25/03/2015

They summarise the discussion on the responsibility modern central banks may have for price stability and payment systems, as well as supervision of individual financial institutions (microprudential policy) and the financial system as a whole (macroprudential policy). The monetary policy deliberations between the target for inflation and the target for a stable real economy are also discussed, as are various issues concerning the central bank's degree of independence.

They also describe the role a central bank may have in conjunction with a financial crisis by offering emergency liquidity assistance to financial institutions and how such assistance can be designed so as not to contribute to increased risk-taking in the financial system. The article concludes with a number of questions on the central bank's tasks in the future that have emerged partly as a consequence of the financial crisis.

Magnus Georgsson, Anders Vredin and Per Åsberg Sommar
Magnus Georgsson är verksam vid avdelningen för finansiell stabilitet, Anders Vredin vid stabsavdelningen och Per Åsberg Sommar vid avdelningen för marknader.