Because banks are the conduits through which monetary policy decisions are transmitted to the real economy, it is synergistic to entrust responsibility for prudential regulation of banks also to the central bank. And if the central bank is the prudential regulator, there is a strong case for it to be the systemic regulator.
This would indeed be the case for many advanced economies today, for which the interest bill is not the main component of the deficit. I agree with Balcerowicz that the standard approach, treating the debt-distressed sovereign as a benevolent social planner maximizing social welfare in an infinite time horizon, is not  1  Cottarelli, Forni, Gottschalk and Mauro (2010).