In particular, the crisis demonstrated that the nature and magnitude of the systemic risk in the financial sector is related not only to the potential illiquidity or insolvency of large banks or other major regulated financial institutions, but it also depends on the close intertwining between financial institutions, markets and infrastructures.
Furthermore, in setting monetary policy it is important to have a sense of how a change in policy is transmitted through the banking system to the broader economy. Also this information flows more easily if the supervisor is not too distant from monetary policy makers.