The Evolution of the Financial Stability Mandate: From its Origins to the Present Day

53 Pages Posted: 20 Jan 2015 Last revised: 16 Jun 2021

See all articles by Gianni Toniolo

Gianni Toniolo

University of Rome Tor Vergata - Faculty of Economics; Centre for Economic Policy Research (CEPR); Duke University - Department of Economics

Eugene N. White

Rutgers, The State University of New Jersey

Date Written: January 2015

Abstract

We investigate the origins and growth of the Financial Stability Mandate (FSM) to examine why bank supervisors, inside and outside of central banks succeeded or failed to meet their FSM. Three issues inform this study: (1) what drives changes in the FSM, (2) whether supervision should be conducted within the central bank or in independent agencies and (3) whether supervision should be rules- or discretion/principles-based. As histories of bank supervision are few, we focus on the history of six countries where there is sufficient information, three in Europe (England, France, and Italy) and three in the New World (U.S., Canada, and Colombia) to highlight the essential developments in the FSM. While there was a common evolutionary path, the development of FSM in each individual country was determined by how quickly each adapted to changes in the technology of the means of payment and their political economy, including their disposition towards competitive markets and openness to the world economy.

Suggested Citation

Toniolo, Gianni and White, Eugene N., The Evolution of the Financial Stability Mandate: From its Origins to the Present Day (January 2015). NBER Working Paper No. w20844, Available at SSRN: https://ssrn.com/abstract=2551652

Gianni Toniolo (Contact Author)

University of Rome Tor Vergata - Faculty of Economics ( email )

Via Columbia n.2
Rome, rome 00100
Italy
+39 06 7259 5734 (Phone)
+39 06 202 0500 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Duke University - Department of Economics ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708-0204
United States

Eugene N. White

Rutgers, The State University of New Jersey ( email )

311 North 5th Street
New Brunswick, NJ 08854
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
8
Abstract Views
300
PlumX Metrics