Post-Crisis Regulatory and Supervisory Arrangements – The New ‘Old’ Central Banking

The Global Financial Crisis (GFC) exposed clear gaps in the pre-crisis regulatory and supervisory framework in most of financial systems worldwide, but not in all financial systems. Optimal design of supervisory and regulatory arrangements in the post-crisis perspective requires identifying elements that failed in helping predicting current slowdown, and those that directly or indirectly affected vulnerability of financial markets. Both tasks appear to be as challenging as twelve labors of Hercules: demanding, covering wide aspects of financial and macroeconomic environment, requiring cooperation of many key agents in all markets; hence truly virtually impossible.Instead of identifying ‘failed' elements, we propose the positive approach to the post-crisis regulatory and supervisory framework, which is proving that some institutional arrangements and basic elements of financial safety net helped some countries avoid the crisis. There are many important questions, which should be treated as a starting point for discussing changes in supervisory and regulatory framework, especially in relation to the central banking. Should central banks become less powerful and be made more subject to political control, or be given more tools to achieve financial stability? Should the trend of removing central banks from direct supervisory responsibilities be reversed? Is the period of ‘central banks' triumph', a period in which their independence and autonomy was widely accepted, now over?