Well, the truth is that they are sometimes hard to separate. It is hard to delineate when financial stability gets so important that it affects monetary policy and vice versa. And what’s more, things are not as simple as they used to be. Today, innovations like online shopping, or global value chains, add to the complexity of maintaining price stability.
And these days financial stability is about much more than just banks. And yet, the central question remains. What should central banks do? What should their functions be? And what their objectives? Should they focus on both price stability and financial stability? Or just concentrate on price stability and leave financial stability to others?