Whether it can adapt to address unique but longer-lived shocks (such as an asset boom or secular changes wrought by globalization) is the pertinent question. What constitutes a "unique" shock? Can we expect authorities, if they are granted flexibility, to be sufficiently disciplined not to decide that all shocks are uniquely virulent? Everyone always thinks they live in interesting times.
Financial imbalances certainly are interesting. However, it is not clear that monetary policymakers should be the first line of defence. Recent events in a variety of jurisdictions demonstrate the shortcomings of the current system where the degree of financial stability is a by-product, rather than an objective, of regulatory policy.