Reflections on Financial Stability Mandate and Systemic Risks

The financial stability mandate of the Bank has been questioned due to a perceived failure in addressing systemic risks, particularly in the context of the recent economic events. It is argued that the Bank holds a duty to ensure the overall safety of the system, not just individual financial institutions. The 1694-established role of the Bank was reinforced by George Osborne to include the objective of maintaining the system's stability. The 0809 financial crisis signified the importance of monitoring the system as a whole. The recent issue concerning pension funds and non-banks highlighted a miss in identifying market risks. This instance underscores the necessity for the Bank to be vigilant about systemic risks to achieve financial stability.