*  *  *  Regulation and prudential supervision of banks The Bank of Papua New Guinea (BPNG) has regulatory and Supervisory powers and duties over commercial banks under the Central Banking Act 2000 (CBA) and the Banks and Financial Institutions Act 2000 (BFIA).
There needs to be an understanding of who is responsible for financial stability and how it should be executed. Clear parameters need to be set and formalised arrangements made. There can be little doubt that the central bank plays a key role in financial stability. In fact, most central banks already have an explicit or implicit responsibility in this regard.