Our challenge going forward is therefore, in my view, to build on our improved monetary policy and regulatory frameworks and focus on their steadfast implementation, rather than to establish a lasting trade-off between financial stability and price stability in central banks’ objective functions.
Such a trade-off would not solve the implementation challenges of leaning-against-the-wind, while it may rekindle the deeper policy challenges that central banks encountered in the past when they sacrificed price stability for other policy concerns.