But, more generally, some of us are beginning to wonder whether globalization should lead to a reassessment of central banks’ primary objective of price stability. Especially now, in the light of the recent actions by the US Federal Reserve which seems to be more concerned about staving off recession and kick-starting the economy.
It is therefore essential that a suitable mechanism is in place to ensure that the required supervisory or regulatory actions are implemented in an effective and timely manner. No reflection on the appropriate macro-prudential framework for Europe would be complete without due consideration of its international dimension. This global financial crisis has underscored the importance of concerted policy responses globally.