both monetary policy and prudential policies are conducted by the central bank, dedicated governance arrangements are needed to ensure monetary policy independence ( imf, 2010 ). third, how to coordinate macro - prudential tools with other supervisory and regulatory agencies? this issue becomes all the more important when regulatory and supervisory functions of financial system do not fall under central banks ’ purview. fourth, there are also risks that macro - prudential tools may under certain conditions act as substitutes to policy interest rates and thereby could undermine the effectiveness of monetary transmission mechanism. lesson 4. financial stability : a shared responsibility? there is no denying that financial stability, by its nature, lacks precise specification and measurement unlike price stability. even though greater role for central banks has been widely recognized for ensuring financial stability, unlike price stability, a formal institutional framework for better coordination with other regulatory agencies is yet to evolve. caruana ( 2011 ) highlighted that determining the manner of interaction and ensuring central bank autonomy needed to achieve price stability, will not be easy. nonetheless, a number of countries, viz., the uk, the us and euro area are gearing towards a new set of arrangements for better coordination between financial regulatory agencies. in particular, central banks are being assigned with an enhanced role for financial stability in bis central bankers ’ speeches view of their informational advantage with respect to the dynamics of the financial system. for instance, in the uk a financial policy committee ( fpc ) has been set up under the chairmanship of governor of the bank of england to promote financial stability objective. within the bank of england, a prudential regulation authority ( pra ) has been constituted to deal with issues related to macro - prudential regulation for reducing risks across the financial system. in this context, it may be noted that in many emes, including india, the responsibility for executing monetary policy and supervising the financial system rested with the central banks. this sort of arrangement proved to be more effective during the crisis, especially by enabling central banks to undertake macro - prudential measures. in the recent years, the reserve bank conducted macro - prudential regulation being both the monetary authority and the regulator of banks and non - bank financial institutions. however, there are different regulators for the capital market, insurance and pension fund. in order to facilitate coordination amongst the various regulators of the financial system, recently a financial stability and development council ( fsdc ) has been set up with the finance minister as chairman. while

derville rowland : financial literacy - empowering consumers to protect their financial future remarks by ms derville rowland, deputy governor of the central bank of ireland, at the national financial literacy strategy stakeholder event, cork, 5 july 2024. * * * good morning. thank you to minister chambers and his department for the invitation to be here today. i am delighted to take part in this important event and to support the development of ireland's financial literacy strategy. 1 the financial decisions we make – at different points in our lives – can have a profound impact on our long term financial well - being, and as a result, our overall quality of life. financial literacy is a core element of making the best decisions possible. and financial literacy is more than just being able to read a statement or digest lengthy risk disclosures accompanying a product or service. it is about having a broader understanding of finances, including where there are risks and how to go about understanding these in a meaningful way. the challenge we face in making good financial decisions is that, generally speaking, consumers of financial services products will always know less about those products than the industry selling them. accordingly, any strategy in this area must seek to rebalance the scales towards consumers. while the importance of individuals acting for themselves cannot be understated, there is a major onus on the state's consumer protection framework – and a major onus on firms – to ensure consumers'interests are secured. i will first give a little more context on how the central bank views this issue before detailing some of the work we are doing through this prism. the scales of knowledge : protecting consumers is at the heart of what we do at the central bank. we know that consumers who are well - informed and understand financial products and services are better placed to make good financial decisions and to look after their interests. these consumers are less likely to be vulnerable to harm from firms that are not securing their interests, and they are less vulnerable to frauds and scams. this is why high levels of financial literacy empower consumers to make effective and informed choices to safeguard their financial well - being. but it's not quite that linear. my background is as a barrister, and there is a legal term many here will be familiar with – " equality of arms ". at its simplest, it means both sides must have a fair opportunity to present their case. a sense of balance to the scales, if you will. now, think of the single biggest financial