This consideration, along with the principles of prudence and transparency that are required for all public institutions entrusted with the management of public funds, calls for the establishment of state-of-the-art risk management frameworks and the highest governance standards. Risks taken in central banking activities need to be analysed in a holistic manner, considering the interaction of different portfolios and operations.
The goals of the central bank as set out in recent legislation around the world are typically three-fold.