Given my role at the Bank in overseeing the Financial Stability Department, my talk today is aimed at clarifying some current thinking around financial vulnerabilities and monetary policy. It is important to stress that our thinking on these issues is still a work in progress and that a proper quantification of the forces at play remains an area of active research.
The diverging monetary policies of Europe and the United States will be a major issue in 2016. How do you see this divergence, however slowly it may develop? We don’t coordinate our actions, but that doesn’t mean that we don’t talk to each other. The occasional additional phone call may be made in such a situation.