##reen and dincer ( 2011 ) this process was related to the strengthening of the independence of central banks, in light of their narrow mandate to achieve price stability. however, the global financial crisis has shown that central banks cannot disregard financial stability considerations, whether they are part of their explicit mandate or not. the most widely cited benefits of having monetary policy and bank supervision residing under one roof are related to : i ) the exchange of information, ii ) shared concern for financial stability. 5 the first benefit may be well illustrated by the uk experience : the failure of supervisors to head off problems in northern rock and prevent the first bank run in more than a century is an outcome widely attributed to imperfect coordination and inadequate information - sharing between the fsa and the bank of england ( eichengreen and dincer, 2011 ). bank - specific information is very important for central banks when they act as lenders of last resort. the central bank is the ultimate guarantor of financial stability during a crisis. in performing its lolr function, the central bank has to assess the liquidity and solvency of its counterparts. more generally, central bank risk management would benefit from better access to information on the financial health of banks to assess the quality of the collateral that these banks provide. especially in times of tensions, having such information in house increases the timeliness of the information flow. bernanke ( 2007 ) underlines that supervisory responsibilities give the central bank access to a wealth of granular on each bank ’ s organization, management structure, lines of business, financial condition, internal controls, risk - management practices, and operational vulnerabilities. this is beneficial for the conduct of monetary policy because banks play a central role in the transmission of monetary policy impulses. for example, supervisory information on bank capital is useful to assess the contribution of capital constraints to credit developments ( bernanke and lown, 1991 ). similarly, monitoring the portfolio choices of banks is useful to assess the consequences of monetary policy on the accumulation of risks. this information improves the ability of central banks to prevent financial instability. symmetrically, supervision benefits from information that central banks acquire from their frequent contacts with banks for monetary policy purposes. also the role that central banks traditionally play in payment and settlement systems provides them with additional sources of for an updated and systematic discussion of the relationship between central banks, financial regulation and supervision after the global financial crisis, see eijffinger and masciandaro ( 2011 ). see,

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