Governments have addressed safety concerns by imposing capital requirements on financial institutions, restricting their ability to engage in risky activities, supervising their adherence to riskreducing practices, and setting up deposit insurance. To limit contagion, central banks have the power to make liquidity loans to financial institutions in the payments system.
1 With thanks to Jonathan Dent, Caroline Mehigan, Kevin Mullen, Cian Murphy, James  O'Sullivan and Darragh Rossi for their support in preparing this speech. 2 Smil, "How the World Really Works" (2022) Penguin. 3 Makhlouf, "The Central Bank's Regulatory Philosophy: Regulating for Stability and  Positive Outcomes" (2022). 8/8  BIS - Central bankers' speeches