I don’t think so. While I am not in favour of a dual monetary policy mandate, I am convinced that monetary policy cannot stand on the sidelines when financial imbalances build up. First, we cannot be sure that macroprudential policies will eliminate financial imbalances. The experience with macroprudential instruments is still limited, and the toolkit is still incomplete.
Second, the crisis has vividly demonstrated how financial instability affects inflation developments and the capacity of the central bank to safeguard price stability. Therefore, monetary policy would be wise to take the implications of financial imbalances for price stability into account. As the financial cycle is longer than the business cycle this comes down to extending the policy horizon.