After the Financial Crisis
Elgar original reference
Edited by Sylvester Eijffinger and Donato Masciandaro
Sylvester Eijffinger and Donato Masciandaro The objective of this volume is to offer an updated and systematic discussion of the relationship between central banks, financial regulation and supervision after the financial crisis. The current crisis has raised important questions about: 1. the compatibility of monetary and financial stability and consequently 2. the changing face of central banking, as well as 3. the architecture of financial regulation and supervision. Before the crisis, in the past two decades, changes in the financial landscape and architecture were characterized by two distinctive features: consolidation and specialization. Supervisory regimes can be classified as follows: the vertical (silos) model, which follows the boundaries of the financial system in different business sectors, and where every sector is supervised by a different agency; the horizontal (peaks) model, which follows the difference among the public goals of regulation, and where every goal is supervised by a different authority; and the unified (integrated) model, where a single authority supervises the entire financial system in pursuing all public goals. On one hand, reforms of institutional settings were driven by a general trend to reduce the number of supervisory and regulatory agencies, to reach the unified model – unknown before 1986 – or the vertical model. In both models financial supervisors have specialized themselves with a well-defined mission. On the other hand, the trend towards specialization has become particularly evident, if we observe the route that the major central banks have followed. The central banks with full responsibility for monetary stability – the Federal Reserve...