Quantitative analysis and modelling can also help to establish institutional and behavioural norms to rein in patterns of instability and developing proper learning devices to deal with major shocks and regime changes. In turn, models should take into account the impact of such norms on economic developments. Central banks have a crucial role to play. There are clear complementarities between financial and monetary stability.
Sometimes these are formally recognized in their official mandate, but even when this is not the case, central banks must take them into account in their policy decisions. In this respect, I would like to quote from a book by the brilliant Banca d’Italia economist Curzio Giannini, who passed away prematurely about ten years ago.