Indeed, if a bubble was particularly large and persistent, a central bank that used the cure of higher interest rates could end up causing the very economic damage it was trying to prevent. BIS central bankers’ speeches  1  On the other hand, the Bank recognized that price stability was a necessary, but not sufficient, condition for financial stability.
Given our keen interest in a well-functioning financial system and our macro perspective, we worked to raise awareness of stability threats. Our decision to begin publishing our Financial System Review (FSR) in 2002 showed our early commitment to promoting financial stability. We used the phrase “global imbalances” a lot in speeches leading up to the crisis.