It could be reminded though that it worked well for the economy because of the very expansionary fiscal policy and the wealth effects on other asset markets (bonds and real estate) induced by the very aggressive monetary policy. The final result is that the so-called global imbalances are still with us and no one knows how their winding down will play out.
This discussion highlights the importance I attach to financial stability as one of the core mandates of any central bank. In this context, I agree with Blinder’s conclusion that important supervisory responsibilities should remain with central banks (Question 5) . This conclusion stems directly from the strong complementarities that exist between the macroeconomic prudential surveillance framework and the microeconomic supervisory responsibilities.