2017 ) and the references therein. also, the need for some regulatory independence is not exclusive to the central bank ; see bernanke ( 2017 ) for a discussion. - 4financial stability, transparency and accountability in a democratic system, any degree of independence brings with it the obligation to provide appropriate transparency. in turn, transparency provides an essential basis for accountability and democratic legitimacy by enabling effective legislative oversight and keeping the public informed. 4 of course, central banks also need to stick closely to our mandates ; the case for independence weakens to the extent that central banks stray into issues that the legislature has not assigned to us. 5 there is also an important policy effectiveness argument in favor of transparency. in the financial stability arena, there is no better example of this than the role that the first round of stress tests played during the crisis in restoring confidence in the u. s. banking system. 6 so in the financial stability realm, the case for enhanced transparency is not just about being accountable ; it is also about providing credible information that can help restore and sustain public confidence in the financial system. the post - crisis regulatory system recognizes the importance of enhanced transparency, both about financial institutions themselves and about the processes and expectations of regulators and supervisors. before the crisis, supervision focused on the safety and soundness of individual institutions and was insufficiently attentive to risk in the financial system as a whole. supervisory judgments about firms were shared with the public only in rare and exceptional circumstances. financial stability tools were deployed after the fact, to address specific events that emerged to threaten stability. it is an understatement to say that this approach proved inadequate in the crisis. see kaufmann and weber ( forthcoming ). see goodhart and lastra ( 2017 ). see bernanke ( 2013 ). - 5the post - crisis regime has shifted to implementing preventive policies well in advance of any crisis. 7 newly established ex ante policies include building the resilience of institutions by requiring more and higher - quality capital and liquidity buffers ; a regime of stress tests undertaken by supervisors ; and resolution planning, which requires firms to analyze their own potential for distress or failure and create a plan to be used in the event of bankruptcy. these post - crisis policies have benefitted from public solicitation of feedback and in many cases from consideration in open meetings of the board of governors. transparency and incorporation of public feedback in these areas have produced more effective supervision and regulation. for example, transparent

2017 ). “ public trust in government : 1958 - 2017, ” webpage, pew research center, www. people - press. org / 2017 / 12 / 14 / public - trust - in - government1958 - 2017. tucker, paul ( 2017 ). “ what is macroprudential policy for? making it safe for central bankers, ” speech delivered at “ financial systems and the real economy, ” a conference sponsored by bank negara malaysia and the bank for international settlements, held in kuala lumpur, march 31, https : / / www. bis. org / publ / bppdf / bispap91 _ keynote. pdf.