Monetary authorities must have their finger on the pulse of the financial markets. After all, monetary policy decisions have direct implications not only for the money market but also for the foreign exchange and capital markets - both nationally and globally. Today, given interlinked markets and internationally active credit institutions, instability can spread more easily.
This tendency is being reinforced by the fact that some credit institutions are acquiring new, truly global dimensions - as is illustrated by the announced merger of Deutsche Bank and Dresdner Bank here in Germany. Hence there is a much greater onus on central banks than in the past to take on responsibility for the financial stability of the financial markets, too.