The longer the period of low interest rates persists, the greater this risk becomes. When it comes to financial stability risks, macroprudential policy is the first tool of choice, so as not to have to water down monetary policy’s focus on price stability.
This would involve taking supervisory measures to ensure that banks and savings banks are sufficiently resilient to withstand financial or economic shocks. However, a monetary policy that aims to ensure price stability cannot completely ignore financial stability risks. After all, the financial crisis has taught us that financial stability risks also frequently endanger price stability.