This note discusses why it might be desirable for a central bank to have a microprudential supervisory role and why a single micro-prudential supervisor might be better than a collection of national supervisors. It argues that central banks should not be macro-prudential supervisors. It describes the skills that are necessary when a central bank is the provider of financial stability and the bank supervisor, as well as the monetary policy maker. It describes the institutional features of a central bank that are necessary if providing financial stability and bank supervision are to be regarded as legitimate roles for the central bank in a democratic society. It suggests how the accountability that is necessary for carrying out these political tasks can be squared with the independence required for monetary policy
