There are other fundamental arguments for central banks being fully involved in banking regulation and supervision.
If we look at the cyclical-adjusted fiscal balance over time, we see an impressive improvement in the run up to the euro. Between 1995 and 1999, the average public sector deficit fell from 4.5 to 1.5 percent of GDP. In the following years this deficit worsened again, to a low-point of 2.8 percent of GDP in 2002.