For me, it is the substantial rise in the issuance of structured credit in the mid-2000s that facilitated a huge increase in subprime mortgages and leveraged buyouts driven by private equity.8 The unfinished business here is coming to a consensus about what monetary policy can and should do about financial vulnerabilities, and about how monetary policy fits into the rest of the policy framework.
Clearly microprudential and macroprudential regulations are on the front lines, and inflation targeting is the central bank’s primary mission.