Besides, in past crises, a supervisory model with a separation between the central bank and supervision was not shown to be more successful than the model with monetary policy and supervision under one roof. On which issues do conflicts of interest arise? Different interests could play a role in, say, the emergency loans for banks facing liquidity problems.
From the banking supervisor’s perspective, this liquidity assistance is initially welcome, because it gives the bank time to resolve problems. The monetary policy-maker must ask what transactions the liquidity will be used for, or whether the bank concerned is solvent. Do you ever feel schizophrenic in your double role? No, I believe that I manage to separate both tasks.