9 Aside from fulfillment of the central bank’s role as lender of last resort, the best monetary policy can do for financial stability is to avoid becoming a source of problems, notably, by deviating from the primary goal of price stability. For example, monetary policy can react preemptively to aggregate demand pressures that may endanger the inflation target.
As a beneficial byproduct, this measure may contribute to the maintenance of financial stability by indirectly attenuating incentives for financial excesses. Even though monetary policy may thus aid financial stability, it can hardly take the task on as an objective in itself. To begin with, such a goal cannot be translated into an unambiguous quantifiable target. Hence, the evaluation of its attainment is cumbersome.