Institutional Separation between Supervisory and Monetary Agencies (1993)

Abstract

The early history of Central Banking led to the functions of monetary management and the role of Lender of Last Resort being combined within the nascent Central Bank (see Goodhart, 1988). Where established, (e.g. in Sweden, UK, France, Italy), the Central Bank was the government’s bank, and, until the latter part of the 19th century, generally the largest bank within the economy. As such, it was assigned the overall responsibility, explicitly or implicitly, for maintaining currency convertibility into specie, the prime function of macro-monetary management until 1913.

Chapter 1 in F. Bruni (ed.) Prudential Regulation, Supervision and Monetary Policy (Centro di Economia Monetaria e Finanziaria ‘Paolo Baffi’, Università Commerciale Luigi Bocconi, 1993): 353–439.