This paper considers developments which have necessitated greater involvement and a greater role
for the central bank in financial regulation and supervision. The aftermath of the 2007/08 Financial
Crisis has witnessed the enactment of legislation such as the Banking Act of 2009 which has not
only introduced greater statutory powers for the central bank, but also the Special Resolution
Regime. As well as a consideration of arguments which are in favour of the central bank’s role as
supervisor and lender of last resort, the importance of central bank independence and safeguards
which exist to ensure that sufficient accountability is fostered, will be considered. Safeguards and
accountability mechanisms which are adequate, such that, whilst ensuring that the regulator is not
susceptible to regulatory capture, do not impede the ability of such a regulator to obtain vital and
necessary information from systemically important individual financial institutions. In its support of
the view that central banks should assume a greater role in supervision, this paper not only seeks to
justify why such a degree of involvement is vital to ensuring and maintaining stability in the
financial system, but also those factors which are considered to be necessary if such a role is to be
effectiv
