But it does not necessarily follow from this that the macro prudential oversight or the financial stability mandate should be located solely within the central bank. Financial stability requires a national response influenced by political priorities. During the crisis, the fiscal authorities in a number of countries made large capital injections into ailing banks and also provided government guarantees.
Clarida, G., J. Gali and M. Gertler (1999), “The Science of Monetary Policy: A New Keynesian Perspective,” Journal of Economic Literature, American Economic Association, 37(4), 1661–1707. Clinton, K. and M. Zelmer. 1997. “Constraints on the Conduct of Canadian Monetary Policy in 1990s: Dealing with Uncertainty in Financial Markets,” Technical Reports 80, Bank of Canada. Côté, A. 2007.