The Crucial Rol of Central Banks in the International Financial Architecture

Abstract

Central banks, as institutions of a state, banker of banks, regulators, and supervisors, have as their primary objective the pursuit of both monetary and financial stability. The pursuit of monetary stability, in its internal aspects (price stability) as well as external ones (exchange rate stability), has been a constant since the creation of the first central banks. With the course of history and the recurring financial crises, and especially after the global financial crisis of 2007-2009, financial stability was added to this primary objective. Financial stability is understood as the stability of the financial system as a whole. Therefore, this article argues that central banks have a crucial role in the international financial architecture that transcends their local mandates and places them at the heart of the global financial and monetary system.