It is often argued that achieving the two objectives, price stability and financial system stability, requires two policy instruments. Active discussions are continuing regarding the need for developing prudential policy measures, including the countercyclical implementation of minimum capital adequacy requirements. I completely agree with the necessity of developing prudential policy measures.
Having said that, I am wondering whether it is valid to employ the Tinbergen principle in this context. The two objectives are not independent but closely connected with each other. It does appear that an intra-temporal trade-off exists between current price stability and current financial system stability.