Volume 27 (2016) / Issue 1
The 2008 financial crisis not only exposed the weaknesses and loopholes in the financial regulatory framework but also casted doubt on the efficiency of the existing financial supervisory arrangements. Indeed, the 2008 meltdown has spurred intense debate regarding the appropriate institutional structure for financial supervision, which has culminated in the ongoing radical revamping of several countries’ supervisory frameworks. In this paper, our objectives are to discuss the role of central banks in financial supervision, with a special emphasis on macro-prudential supervision; to present the trends which have underlain the financial supervisory architecture in the EU-28 countries over the last two decades; and to make some preliminary observations on the effectiveness of the central banks as micro-prudential supervisors. In conclusion, we delineate the core institutional and organizational pillars of an effective model of financial supervision.
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