The Remit says that the Government wants a financial system that is strong, efficient, and inclusive. In financial stability, if you want to make a bank strong, you may limit the amount of higher risk transactions institutions can make. However, by doing that, Te Pūtea Matua may undermine financial efficiency and inclusion.
To further this effort, the Bank of Italy, together with the CEPR, is organising a conference on “Monetary policy after the crisis” next June in Rome. The conference is intended to stimulate discussion on how our conventional wisdom on the transmission mechanism should be revised, in order, for one thing, to take heterogeneity into account.