7 For a lucid analysis along these lines, see W. Dudley (2013) Why Financial Stability is a Necessary Prerequisite for an Effective Monetary Policy. Remarks at the Andrew Crockett Memorial Lecture, Bank for International Settlements 2013 Annual General Meeting, Basel, Switzerland, 23 June 2013.
4  Necessity First, a sound and stable financial system will reduce the need for monetary policy actions aimed at macroeconomic stabilization. The global financial crisis and the ensuing Great Recession have shown that shocks emanating from the financial system can have a devastating impact on the real economy.