Central banks are providers of payment systems, and they contribute to banking and financial market supervision. Technological innovation in the financial sector thus affects central banks along many dimensions. In this paper, I focus on another important mandate of central banks: financial stability. After the global financial crisis, central banks were assigned a crucial role in contributing to a stable financial system.
According to the German financial stability legislation, for instance, the Bundesbank is a member of the national Financial Stability Committee and provides analytical inputs on the stability of the German financial system.