So it would appear self-evident that central banks, given their role as lenders of last resort and their responsibilities in monetary policy and liquidity management, should play a key role in safeguarding financial stability. However, the lender of last resort might be the most important backstop during periods of financial turbulences, nevertheless this should not be a “free lunch”.
At today’s hearing, I would like to discuss the lessons of the financial crisis and how we have transformed our regulatory and supervisory approach. Before the crisis, our primary goal was to ensure the safety and soundness of individual financial institutions.