One of the changes that I brought about was the establishment of a Financial Stability Unit in October 2007, with a clear crosscutting mandate to identify and assess financial stability issues. But as the sky was then a spotless blue and the financial crisis not even a distant prospect, this initiative hit a wall of incomprehension and ignited a raging turf war.
As emphasised in the political economy literature, this short-term approach is, in fact, built into the political process itself, which demands that political actors are re-legitimised by means of elections at regular intervals. However, short-termism can and should be corrected through fiscal rules that work towards the sustainability of public finances.