But it will not supervise banks (not even as an agent) and it will not manage government debt. It is agreed that those functions will remain firmly with the national central banks (or other relevant agencies). In payment systems the ECB will be responsible for only the tip of the iceberg, that is TARGET, the system linking the various national payment systems of EU member states. This narrow focus is no accident: the ECB’s task is to maintain monetary stability, and its design reflects that. The European System of Central Banks, collectively, will do much more than that, of course. Discussions between EU central banks on how monetary policy will operate within the EMU are well advanced, and the European Monetary Institute published a report in January setting out what is agreed and what remains to be decided. In principle, the creation of the ECB in 1998 (in advance of Stage III) or thereafter need not affect the other activities of EU central banks, whether they are in or out of the euro-area, provided they do not conflict with the ECB’s achievement of monetary stability. But it seems very likely that some of the activities of the national central banks, and especially those who are members of the euro-area, will change character as EMU develops (if it does). That is partly because questions will undoubtedly be asked about costs.
Legislation in 1942 followed the then German model, particularly in making the Bank of Japan subservient to the Ministry of Finance; and after the war, there was American influence. 1 Rosa Maria Lastra, “Central Banking and Banking Regulation”, LSE Financial Markets Group,  1996, page 285. BIS Review 33/1997  -3-  In Figures 1 and 2, I have attempted to capture some of the distinctions between these leading central banks. (Because I am concentrating on distinctions, I have omitted common tasks - such as the issuance of banknotes and acting as banker for government - which are carried out by virtually all central banks.) Figure 1 shows the UK’s “scores” in five areas, while Figure 2 adds in, by way of comparison, the other G5 countries. Mapping the distinctions is not an easy task. For instance, though in Germany a government office is responsible for banking supervision, it is central bank staff who undertake much of the day-to-day work of monitoring individual banks. In France, supervision is the responsibility of the Commission Bancaire, but its secretariat is effectively part of the Banque de France, and the Governor chairs it. And in Japan, the central bank closely monitors the large banks, though the responsibility for supervision formally rests with the finance ministry.