The dominant view at the time was that financial imbalances and crises should not occur in a low inflation environment, and where they did, central banks were not in a position to recognise or predict them. Nor did they have appropriate tools to prick incipient  BIS central bankers’ speeches  3  bubbles.
Interest rates would had to have been raised to unacceptably high levels in a low inflation environment in order to deal with the bubbles that had emerged.