It is quite obvious that a correct and orderly transmission of monetary policy to the economy requires a sound and stable financial system. Financial instability may distort the transmission of monetary policy and ultimately reduce its effectiveness in maintaining monetary stability and contributing to long term sustainable growth.
The second crucial aspect is that conditions in financial markets in general, and financial stability considerations in particular, always need to be part of the overall assessment of economic conditions and the analysis of risks to price stability. This is an analytically challenging and very information-demanding exercise, in which central bankers have to be involved.