In terms of financial regulation, the challenges that the central banks' policy responsibilities cause to their risk-taking capacity are met more easily if the financial health of the banking system is sound; if the supervisory information is sufficient; and if crisis management procedures and institutions are up to their tasks.
When those conditions are met, the central banks' main financial stability task, the provision of liquidity to fundamentally sound institutions, is easier to fulfil. The central bank should not be expected to constitute "the only game in town".