The financial market environment : the new role of the central bank

Abstract EN

The consensus of the pre-crisis 2008 on the central bank's role is shredded because of the results of its strategies and levels of intervention, which inadvertently, created the conditions leading up to the current credit crisis.

Unfortunately, when we turn to the economic orthodoxy for an opinion on what went wrong and how we can fix it we find there is not even an established framework by which we can discuss the issue.

This work paper aims to show how the central bank role (which is the epicenter of the financial system) has radically changed in order to respond to the current financial crisis constraints, focusing on the central banking before this crisis, secondly the new role of the central bank as a monitor of financial stability (not only a monetary one) with an action combined with its government to implement a growth and development strategy.