Effects on the independence of a central bank Part of the academic and political debate about the best financial supervisory architecture has been devoted to whether the central bank should be involved in the prudential supervision of banks.3 Supervision within the central bank?
– This specific debate on the benefits and risks of entrusting a central bank with banking supervision is a long standing one.4 The literature generally concludes that no single pattern of division of supervisory responsibilities between the central bank and other authorities is unquestionably superior.