BIS Review 126/2009  7  Third, the recent financial crisis has confirmed that a central bank’s inability to identify in real time the precise mechanisms through which financial imbalances evolve and to anticipate the exact timing of their unwinding does not mean it is unable to identify the build-up of imbalances.
In the run up to the crisis several policy makers did identify the under-pricing of risk as a major source of concern. In this context, let me mention that recent research – including research conducted at the ECB – has reviewed more systematically the implications for monetary policy of a more explicit role for financial factors in macroeconomic models.