Should financial stability mandate be with central banks or a seperate agency?

Fernando Restoy of BIS in this paper weighs evidence in favor of central banks:

How should policy objectives be assigned between different authorities? Traditionally, this question has revolved around identifying conflicts and complementarities between their various remits. Equally important, however, is the question of whether specific policy instruments can be neatly assigned to specific objectives. When a specific policy instrument can significantly influence more than one objective, the case for assigning each of those objectives to a different agency weakens. Following this line of thought, and based on the experience with Covid-19 policy response, there would seem to be a clear case for assigning the financial stability mandate to central banks and an even stronger one for including both macro- and microprudential responsibilities in that mandate. 

Age old debate. No easy answers.

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