And addressing these problems is the first priority and most effective safeguard against a repetition of the severe dislocations we experienced. But does avoiding such a repetition also require monetary policy to include financial stability along with price stability and high employment in the objectives it tries to accomplish with its policy adjustments?
One of the functions of many central banks (including in Trinidad and Tobago) is to act as banker to governments. One may ask then, shouldn’t a banker provide credit facilities to its client?