4  BIS Review 105/2010  The rationale is this: the central bank maintains close linkages with financial market participants and is also well placed to pick up on financial system strains at an early stage. Additionally, it traditionally carries out the role of the lender of the last resort role at times of financial crisis.
Even though the central bank strives for financial stability, this is not seen as conflicting with price stability. Considering that financial system unrest generally means that the transmission channels of monetary policy are not working as they should, financial stability is a precondition for a price stability.