*  *  *  Relationship between fiscal sustainability and central banks The mission of a central bank is to contribute to sustained growth of the economy by maintaining public confidence in money, and price stability and financial system stability are two facets of this mission. Fiscal sustainability is an important element that has a fundamental impact on both.
According to conventional wisdom, when the government loses its credibility with respect to the sustainability of government debt and does not make enough effort to regain it, this ultimately leads to either inflation or a default on the debt. To put this differently, it is often said that a central bank comes to face a tradeoff between price stability and financial system stability.