Part I European Reform as a Response to the 2008 Crisis, 3 The Relationship between Micro-Macro-Prudential Supervision and Central Banking

3.01 The nature of the involvement of a central bank in the supervision of financial firms and of infrastructure providers is a matter of endless controversy. It is probably incapable of an answer that is generally applicable at all times and in all places. The controversy tends to create as much heat as light because it is often intimately involved in struggles about legitimacy, political or otherwise, influence and, ultimately, power. 3.02 The debate is often confusing because it is frequently couched in terms of extremes in territory where there are no...