Policy-makers around the world have a responsibility to facilitate adjustments in a way that keeps the global economy growing at potential and mitigates the impact of these risks. Our job is to provide a framework that helps market forces promote an orderly adjustment. So what can we collectively do to help prevent a disorderly adjustment?
Rather, a good policy excels in shaping appropriate underlying macroeconomic conditions. For it is precisely when stable monetary conditions are lacking that the risks associated with financial assets become difficult to evaluate. I think this stance is appropriate, at least for the large, developed economies with mature financial markets.