We will have to accept the occasional need to make a judgement about short-term trade-offs, but that is the nature of policymaking. And in any event, over the long run price stability and financial stability surely cannot be in conflict.
First, we have greatly increased our macroprudential oversight, with a particular focus on potential systemic vulnerabilities, including buildups of leverage and unstable funding patterns as well as interest rate risk.16 Under the umbrella of our interdisciplinary Large Institutions Supervision Coordinating Committee, we pay special attention to developments at the largest, most complex financial firms, making use of information gathered in our supervision of the institutions and drawn from financial market indicators of their health and systemic vulnerability.