The events of recent years have amounted to a two-stage crisis, and the second stage of it was specifically European (or more accurately, euro area) in focus. The third is the interdependency between growth and financial stability.
In this respect, central banks are well placed to deal with these challenges, having the relevant expertise in macro-economic analysis, knowledge of financial markets, overseeing payments and settlements infrastructure and (in many cases) explicit responsibility for the regulation and supervision of financial institutions.2 Nonetheless, the financial stability objective of central banks remains clouded with uncertainty.