The role of a central bank is to ensure stable money and sound banking, a role which is defined by law, politics, history, and economics. This anchor of stability relates to the three pillars of our current monetary system: money, bank deposits, and payments. Though other private and public entities have a role in money creation, payment, and supervision, the central bank is the only institution that conducts monetary policy in pursuit of price stability. This power is formidable as it influences risk taking and price formation in the economy. If the central bank is independent from political instruction, the boundaries of its delegated mandate delineate the scope of its activities. In a democratic system those boundaries, and the design of adequate mechanisms of accountability, are essential to preserve legitimacy and credibility. The expansion of the central bank remit in response to the recent crises—the global financial crisis, the COVID-19 pandemic, and now climate change—questions the adequacy of the “narrow” mode or model of central banking, shaped by the economic consensus prevailing from 1990 to 2007, with inflation targets and independent central banks. A new mode or model of central banking—yet to be crystalized—is emerging, with multiple objectives and functions, and porous boundaries. The broadening of the mandate in a time of crisis also brings central banks closer to the political agenda. This is the background for questioning existing institutional arrangements, their independence, and accountability. I consider in particular the evolution of the remit of the Bank of England over the last twenty-five years though I also refer to the European Central Bank and to the US Federal Reserve System.
