Even while the weight of arguments tilts towards acceptance of financial stability as an objective of central bank or monetary policy, there is little agreement about what should be the framework and how it should be implemented: First, even if central banks closely monitor developments in asset markets, how to calibrate the policy response remains an open-ended issue?
Second, do central banks have a sufficient number of instruments to conduct both monetary and prudential policy to fulfill a dual mandate of price and financial stability? If both monetary policy and prudential policies are conducted by the central bank, dedicated governance arrangements are needed to ensure monetary policy independence (IMF, 2010).Third, how to coordinate macro-prudential tools with other supervisory and regulatory agencies?