The focus of supervision was less on permitted activities of financial intermediaries, but on prudential risk management pursued by a combination of balance sheet constraints, supervisory oversight, and, market discipline. Until now, however, this approach has still not delivered durable financial stability.
The foregoing brief review leads me to the conjecture that is the basis of this lecture: the combination of a liberalised financial system and a fiat standard with monetary rules based exclusively in terms of inflation is not sufficient to secure financial stability. This is not to deny that inflation is often a source of financial instability. It certainly is.