A Survey of Institutional Frameworks for Financial Stability

The aim of this study is to get a better understanding of which financial stability responsibilities have been delegated to central banks (CBs), how these responsibilities are executed, and whether accountability arrangements are in place. For this purpose, a questionnaire was sent to all CBs in the OECD area. We find that there is no unambiguous definition of financial stability or systemic risk, and that, generally, the responsibility for financial stability is not explicitly formulated in laws. However, there seems to be a gradual trend towards clarifying the powers and functions of the CB. Moreover, there is considerable heterogeneity in the way CBs pursue the financial stability objective. Our results suggest that the accountability of the financial stability function of central banks is often poorly arranged.